Wall Street veteran Jeff Saut: 'I don't trust the first rally,' but market likely hit its bottom

Key Points
  • Wall Street veteran Jeff Saut said the market may have reached its bottom, but advised investors to be cautious. 
  • "I don't trust the first rally," Saut told CNBC. 
  • "I think the lows are probably in. But I don't think we're going to get right up and run the 100-yard dash here either,"  the chief investment strategist at Capital Wealth Planning said. 
Jeff Saut, chief investment strategist at Capital Wealth Planning
Scott Mlyn | CNBC

Wall Street veteran Jeff Saut advised investors to take a nuanced view of the stock market's gains Tuesday. 

While Saut said he believes the market likely hit its bottom on a historic Monday, he said it will take time before there's a sustained sprint to the upside. 

"I don't trust the first rally. I think we're going through a bottoming process," Saut said on "Power Lunch." 

"I think the lows are probably in. But I don't think we're going to get right up and run the 100-yard dash here either," added Saut, chief investment strategist at Capital Wealth Planning. 

Saut's comments came as equities rebounded Tuesday as investors processed news that the U.S. government is considering fiscal stimulus measures to offset the economic consequences of the coronavirus. 

The Dow Jones Industrial Average closed up more than 1,100 points, or about 4.8%, in a volatile day while S&P 500 and Nasdaq Composite ended up nearly 5%. 

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Nearly two weeks ago, when the three major U.S. indexes fell more than 10% from their recent highs and entered into correction territory, Saut said he thought the markets could still drop further. 

Saut said he had seen signs in the market in January that indicated to sell short-term trading positions in order to raise cash for investment accounts. 

"Quite frankly, I didn't think it would be this deep," he said. 

At the time, Saut said the coronavirus was on his radar, as was the rise of Sen. Bernie Sanders in the Democratic presidential primary. 

But the former chief investment strategist at Raymond James said he did not foresee the "crude oil crash that came out of the blue," a reference to Monday's steep declines in oil prices

Julian Emanuel, Managing Director, Chief Equity and Derivatives Strategist, BTIG
Scott Mlyn | CNBC

Julian Emanuel, chief equity and derivatives strategist at BTIG, takes a slightly different view on the market's short-term direction than Saut.

"We'd expect sort of a retesting day perhaps in the next week or so as we digest news of fiscal stimulus and the Fed [meeting] next week," Emanuel said in the same "Power Lunch" segment.

Bull market not over yet, says BTIG's Julian Emanuel