Market's 'Trump rally' may be set to lose steam, Wells Fargo's Wren says

The Trump rally marks the biggest post-election run for stocks ever—but don't expect this momentum to carry through to year-end.

Wells Fargo strategist Scott Wren, who correctly called the Brexit and post-election rallies, now believes that while the market does have room to run, the fact that the market is currently trading at "fair value." That could mean that it's about to lose some steam.

"This market is trading on the fundamentals over the next 6 to 12 months," Wren said last week on CNBC's "Futures Now." He added: "It would've been trading here, or very close to here, whoever had won the election."

This doesn't just go for the S&P 500 Index, says Wren, but the Dow Jones Industrial Average as well. The index has been hovering just under the highly-anticipated 20,000 level, but Wren actually believes that the event would be "purely a psychological level" rather than a technical level that would give insight into the Dow's next move.

In Wren's eyes, the market will have to face the possibility of inflation, wage inflation, and the notion that the Federal Reserve may hike rates more times than previously thought.

While the Fed did declare that three rate hikes may occur in 2017, Wren believes that anything more than two could actually send bond yields falling and give investors something to worry about.

These reasons together lead Wren to believe that the market will be relatively flat in the year to come, predicting that the S&P will trade between 2,230 and 2,330 by the end of 2017. Wren had previously predicted that the S&P would end between 2,190 and 2,290 this year, which it is currently on track to do.

"The market doesn't trade for anything for more than a brief period of time on what might happen two or four years down the road," said Wren.