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This is the no. 1 S&P 500 sector to avoid here, market bull Jeff Saut says

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One sector to avoid and one to love, according to market bull Jeff Saut

Stocks are within a whisker of all-time highs.

The S&P 500 ended Friday just 0.2% from records after bouncing more than 1% for the week.

But, top market bull Jeffrey Saut isn't trusting one outperforming sector that carried the index to these heights.

"I'm not a big fan of utilities here," Saut, chief investment strategist at Capital Wealth Planning, said on CNBC's "Trading Nation" on Friday. "I've been in this business for forty-nine years. I've been looking at markets for fifty-six years… and utilities are as richly valued as I've ever seen them."

The XLU utilities ETF, which tracks the S&P 500 sector, trades at 21 times forward earnings -- it hit its highest valuation ever earlier this month. The sector is the second-best performer on the S&P 500 this year.

"I have no interest in utilities. I think there is a much better valuation metric in the midstream master limited partnerships where you can get … 80% tax differed yields then you get in utilities," said Saut.

Midstream oil companies focus on the transportation and storage of crude. Example ETF include the AMLP Alerian MLP ETF and the MLPA global X MLP ETF.

The stock market's unbeatable winner – tech – could continue to lead the rest of the pack higher, he adds.

"I like tech. I mean, I see people selling Amazon and looking for the next Amazon and the fact of the matter is the next Amazon is Amazon!" said Saut.

As for the rest of the market, Saut says stocks could be at risk of a pullback, albeit a slight one before rocketing back up to highs.

"l don't think it pulls back much. You've got some divergences out there. I mean, the Russell 2000 hadn't made a new all-time high, the Nasdaq has some divergence between volume and breadth. So…I think you can get a 3% to 5% pullback from here, but the primary trend of the market is up," said Saut.

In fact, Saut says this secular bull market could run another five to 10 years. He notes that valuations are not as stretched as in 2000, and a low interest rate environment should keep the bid under the equity market.

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Don't worry about near-term pullback, says Wall Street bull Jeff Saut