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Wall Street charting pioneer John Bollinger sees 'core economy' stocks leading next leg of bull

  • John Bollinger believes that leadership in the markets will shift to "economically sensitive" industries if the federal government can pivot to infrastructure.
  • Bollinger is the president and founder of Bollinger Capital Management, an investment management and research firm that provides technically driven money management.
  • Bollinger is famous for creating Bollinger Bands, which can be used by analysts to measure the relative "highness" or "lowness" of asset prices relative to previous trades.
John Bollinger
Gina Ferazzi | Los Angeles Times | Getty Images
John Bollinger

Despite worries that the current bull market is aging, John Bollinger believes that a new leader will soon emerge to keep the party going on Wall Street.

CNBC's Mike Santoli spoke with Bollinger in an exclusive interview for CNBC PRO . Santoli asked the widely-followed technical analyst for his thoughts on everything from market leadership to the influence of exchange-traded funds to his favorite methods for investing.

"The focus is going to shift a little bit more to the economically sensitive sectors and you're going to see a little more emphasis on basic industry, on basic materials, sort of the core economy issues," Bollinger said, referring to materials and industrials stocks. "Since the election, there's been a lot of concern about what the economic programs the government are going to put forward … I know that the president has a strong interest in infrastructure and such and I think that they're going to press that."

Bollinger is the president and founder of Bollinger Capital Management, an investment management and research firm that provides technically driven money management and research. He is most famous for his development of Bollinger Bands in the 1980s. The bands are intervals on a price that demarcate relative highs and low given current market volatility.

Bollinger also commented on the effects ETFs are having on trading.

"They've had a tremendous impact. All these exchange traded funds – things like the SPY, DIA, and QQQ just to name a few of the big ones – they have a really interest effect that people don't really talk about very much," Bollinger said.

"They weld the market together. Because these big lists of stocks are bought and sold simultaneously, they cause the action of all of the individuals stocks to become much more correlated than it had been in the past."

The money manager and analyst also explained which tools casual investors can use to help understand the current age of the market in the cycle:

"One thing that people can do that's really useful is watch the new highs and new lows because each day the papers publish the numbers of stocks making new 52-week highs and new 52-week lows in price. Those lists are incredibly good indicators of what's going on in the market. Right now we have almost no new lows. That's surprising because on the New York Stock Exchange we have a lot of very intrasensitive issues."

See here for the full CNBC PRO report and the interview video.