Why this Rally is a 'Fally': Strategist

Markets are in the "mother of all fallies," Kirby Daley, senior strategist at the Newedge Group, told CNBC Monday, explaining that the term "fallies" was established for short-term rallies based on fallacies.

In Europe, shares resumed their two-week rally on continued optimism about earnings, with banks and commodity stocks leading the way. Asian markets also rose, with the Nikkei crossing the 10,000 mark.

But investors should be watching the economic data coming out to see whether this rally could be sustained, Daley said, echoing other analysts' opinions that there have been so many pleasant surprises from companies' results because market expectations for earnings were exceedingly pessimistic.

He also said he was wondering how willing people with "vested interests in the market forces" were to keep the markets up before "reality hits home later on in the year."

Investors should be careful when investing in this market rally, because it may not run much further, Daley said, but added that he didn't recommend shorting it.