This market bull says a 14% correction would not be 'surprising'

J.P. Morgan Private Bank is telling clients to buy the next sell-off, and the odds are high it'll happen this year.

Patrick Schaffer, a generally bullish global investment specialist at the firm, says a correction as deep as 14 percent would not surprise him.

"We don't expect the markets to go up in a straight line. When we do see volatility, we would be prepared to buy those pullbacks," Schaffer said Wednesday on CNBC's "Trading Nation."

The stock market hasn't seen a 10 percent or more sell-off in two years — an unusually long stretch even for a bull market.

If the Dow suffers a 14 percent blow now, it would take the index down nearly 3,500 points. The S&P 500 would fall by 380 points, based on Wednesday's close.

What could spark it? Schaffer believes a geopolitical event or a more aggressive Federal Reserve could be catalysts.

But he doesn't see the pain sticking around because the tax overhaul and global backdrop are positive for stocks — particularly financials, industrials and parts of health care.

Schaffer, who manages more than $150 billion in assets, sees robust earnings as the rally's main driver now. According to his calculations, tax reform adds another 10 to 12 percent to S&P 500 earnings.

"The fundamental backdrop is as strong today as it's been at any point during this cycle," Schaffer said. "We think we can exit the year in the neighborhood of 3,000 in the S&P 500."

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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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