- Despite the booming economy, market strategist Tony Dwyer predicts a near-term pullback of 5 to 10 percent.
- Dwyer told market-watchers to wait for the dip to buy.
- The S&P 500 gained approximately 0.5 percent Tuesday.
The economy is booming, but one of Wall Street's biggest bulls says a near-term pullback is coming.
"History shows that, when the rate of change for the S&P is where it recently got to on this bump up, you have a 2 to 5 percent pullback in the context of the bull market, the uptrend that started in April," Tony Dwyer, chief market strategist at Canaccord Genuity, said Tuesday on "Fast Money."
Still, Dwyer predicted a pullback and said it could look like a 5 to 10 percent move to the downside.
"It’s more of a pause," he said.
Despite all of the positive variables in the economy right now — including this year's huge earnings growth and high consumer confidence and spending — Dwyer said investors should be cautious about entering the market at this moment, because the near-term view "stinks right now."
"We’re overbought in a market where only 52 percent of stocks in the S&P 500 are above their 10-day (moving average), in a highly volatile year, which has been our plan all year," Dwyer said.
Instead, he told market-watchers to wait for the dip to buy.
"This is not a sell," he said. "This is a wait-to-buy."
"We want to buy weakness instead of chase extreme strength," said Dwyer, who calls himself a "raging bull."
"And if you’re an extreme overweight tech… stay overweight, but just cut it back," he said. "The price is giving you such an overweight, you take a few chips off the table there."