Investors should expect a 3% market drop before year-end, BTIG's Katie Stockton says

• Wall Street could see a pullback of about 3 percent before the year ends, BTIG's Katie Stockton says.
• If the drop happens sooner rather than later, there could be a year-end rally, BTIG's chief technical strategist says.

Wall Street could see a pullback of about 3 percent before year-end, strategist Katie Stockton told CNBC on Tuesday.

If the drop happens sooner rather than later, stocks could squeeze in another rally before January, BTIG's chief technical strategist told "Squawk Box."

"The initial support for the S&P 500 is about 2,485," Stockton said. "That's based on its breakout point from September, and with a pullback of the magnitude, I think we would have a great opportunity to take advantage of a year-end rally."

"The swifter the pullback, the more likely it is a countertrend move," she said.

The pullback should help relieve "overly bullish sentiment" or "extreme greed" in the marketplace, Stockton said. She sees the S&P reaching 2,640 in the fourth quarter. It closed at 2,564.98 on Monday, its first down day in seven sessions.

"Earlier in October, we saw the sentiment data get to a point where it is a bit contrarian," Stockton said. "A little pullback should be enough to relieve that condition."

"There's definitely something keeping the floor under this tape," she added.

Also on "Squawk Box," Fifth Third Bank strategist Jeff Korzenik said Wall Street is in a bull market that "everybody loves to hate."

"When I am out speaking to high net worth individuals, they tell me they're holding cash aside," he said. "People used to wait for a 10 percent pullback, then a 5 percent, and now I think they'll take a 2 percent."