×

The market has 'seen the bottom,' predicts Jeff Hirsch of Stock Trader's Almanac

  • Jeff Hirsch of Stock Trader's Almanac is still bullish on the year and sees an almost 50 percent chance of the Dow hitting 29,000.
  • "We've seen the bottom there … at least for the short term," he says.
  • Equities rebounded on Monday after suffering their worst weekly performance in two years.

U.S. stocks should start working their way back up, predicted Jeff Hirsch, editor-in-chief of the Stock Trader's Almanac.

Equities rebounded on Monday after suffering their worst weekly performance in two years.

Hirsch said he believes that sell-off was a technical and emotional move, spooked by fear and exacerbated by a run on inverse volatility exchange-traded funds.

"We've seen the bottom there … at least for the short term," he said in an interview with CNBC's "Power Lunch" on Monday.

Historically, February is a weak month, when January gains tend to consolidate, Hirsch explained. And that's what he expects now.

"I'm still bullish on this year," he said, noting that January had a "trifecta" of bullish trends.

For one, the January Barometer was up, he said. That means if January saw gains, the rest of the year should follow suit. There was also a Santa Claus rally, he said, which is a jump in shares that occurs in the last week of December through the first two trading days of January. Finally, he pointed out that the first five trading days of the year were also higher, which tends to be an early indicator for how stocks will perform the rest of the year.

"We could even get back up towards the upper end of this trend by March, April," he said.

Heading into the back half of the year, Hirsch expects another correction, which he said is typical around mid-term elections.

However, he's sticking with his 2018 forecast, which predicts a 47.5 percent chance the Dow Jones industrial average will hit 29,000.

— CNBC's Arielle Berger contributed to this report.

Disclaimer