One of Wall Street's loudest bulls just got louder — Jeff Saut says economy is 'stronger than a garlic milkshake'

Raymond James' Jeffrey Saut isn't letting the string of new record highs and soaring optimism intimidate him. He doesn't see these factors as contrary indicators to the rally.

Saut still contends there are years remaining in the secular bull market, and his bull call sounds even louder.

"The economy is stronger than a garlic milkshake. Earnings are coming in better than people think," the firm's chief investment strategist said Wednesday on CNBC's "Trading Nation."

It's now 12 months since the Dow broke through the 20,000 milestone, and it's now striking distance from the 26,500 market — a more than 30 percent gain. In January alone, the Dow and S&P 500 have secured intraday all-time highs 13 times.

"There's not a whole lot to see that could go wrong with this," Saut said. "Inflation has picked up a little bit, but it's nothing to be worried about as of yet."

Saut, who believes there are still too many people under-invested in the stock market, has been one of Wall Street's most vocal bulls.

Last May, he correctly predicted on "Trading Nation" that the rally had more room to run and that President Donald Trump's tax cut plan would likely become a reality.

Despite Saut's robust outlook that's built on strong synchronized global growth and benefits from Trump's tax policies, he's still in the correction camp. He believes a textbook correction of 10 percent could happen before spring.

"Our short-term model and intermediate term model that have been very bullish since the beginning of November have targeted the first part to middle part of February as potentially the first point of vulnerability," he said.

If a correction hits, Saut said, it will be short and profitbale rather than long and painful. He already has a plan in place to play it.

"I'm pretty much overweight technology, so I'd probably trim some of those positions," said Saut. "I'm probably not going to take anything out of financials because financials relative to the overall market are not that expensive."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

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 CNBCand 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.

Follow Michael Santoli on Twitter @michaelsantoli

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