With eight weeks until 2020, one of Morgan Stanley Investment Management's top fund managers is positioning for a market breakout that he thinks is just beginning.
Andrew Slimmon, who has $5 billion in assets under management, sees the S&P 500 rallying another 5% before the new year.
"There is so much cash on the sidelines coming into year-end," he told CNBC's "Trading Nation" on Monday. "This could push the market up more than people think right into the year-end."
That would bring the S&P 500 above 3,225, based on Monday's close. The index is already up 23% since January.
"Investors pulled a lot of money out of equities in the first half of the year in anticipation that the economy was going to be very bad. The positioning was very defensive," Slimmon said. "As money comes back into the market which we're starting to see, I think it will chase into the areas that are more cyclical, exposed to upside."
Slimmon was overweight defensives until last summer. He felt the group's prices were getting outrageous. So, he decided to take money out and put it into value stocks, which have gotten historically cheap.
"We've had a growth scare, and we're coming out of that. And what was priced for worse than a growth scare were the value, the cyclical stocks," he said. "Those value stocks are the big opportunity, and they're starting to rally."
Yet he warns it's inevitable recession worries will resurface.
"You can't ignore the fact the yield curve inverted this summer," Slimmon said. "That usually suggests a market that peaks out a year and a half to two years later, and I think a market peaking out some time in 2021 would be consistent with that."