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Next wave of market trouble will create buying opportunity, Wall Street bull Jeff Saut says

Wall Street bull Jeff Saut goes on pullback watch

Wall Street bull Jeffrey Saut sees near-term trouble materializing into a solid buying opportunity.

According to the Raymond James chief investment strategist, there's a high probability an unnerving pullback could drag stocks down as soon as this week.

"We're a little overextended in the short-term," Saut said Wednesday on CNBC's "Trading Nation." "Some of the market's internal energy has been used up."

Saut builds his forecast on a basket of special indicators that he's gathered over five decades on the Street. Based on what they're telling him now, the is vulnerable to a 3 to 5 percent drop from current levels.

"You probably pull back to something like 2,500 to 2,550 on the S&P 500," he said. "I don't think it goes lower than that. I do not think we get a retest off that kind of sequence since the December 24 low."

That's the day of the unprecedented Christmas Eve market plunge, "some of the most intense selling that I've seen in a long time," said Saut.

By Dec. 26, a historic rally sent the Dow soaring 1,086 points and reversed the damage.

He called the bottom in early January. Despite his near-term trouble call, Saut is confident stocks will reach new all-time highs in the second half of this year based on strong economic fundamentals and earnings.

And, he's ready to roll out his buying plan for the next pullback.

"I continue to like technology and health care," he said. "I like the two out-of-favor sectors of energy and financials. I think they're cheap, and good things tend to happen to cheap stocks."

Challenged, indeed.

The Energy Select Sector SPDR and Financial Select Sector SPDR ETFs are down almost 21 percent and 14 percent, respectively, in the past 52 weeks.

"The pullback is for buying," Saut said. "We're in a secular bull market that has years left to run."

Wall Street bull Jeff Saut expects a near-term pullback will hit stocks