'Clear Risk' of a Near-Term Pullback: Strategist

Poor positioning by portfolio managers and a number of key indicators suggest a near-term market pullback is in the works, BMO capital markets chief investment strategist told CNBC on Monday.

"We were inundated with questions from portfolio managers that were clearly under-performing the market," Brian Belski said on "Squawk on the Street."

"When you have those types of conversations with clients, you know that they were straying from their discipline," he said. "When they stray, bad things happen, the market rolls over, you do emotional things and sell stock."

"Poor positioning," he added, "has led to pullback in stocks that we've seen. They were forced to buy the rally because they were forced to participate. They were chasing performance."

Belski said there is a "clear risk" for a dip soon. "Clearly housing numbers have slowed, employment numbers have slowed, company guidance was excessively negative coming into the quarter. So once again, corporate America is becoming conservative," he said. "So if you bid up these stocks and all of a sudden you're worried about valuations and growth, no wonder the market is rolling over on a near-term basis."

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"We're still big believers in a second-half recovery, but we still think we have near-term weakness in the market," he said. Belski's firm holds a 1,575 target on the S&P 500, despite the short-term weakness.

Belski warned that historically, the leaders from a previous cycle are not leaders in the next cycle. In the past cycle, leaders were emerging markets and commodities, along with the weak dollar trade. "That trade has worn itself out and now you have to move on to the next fundamental trade," he said.

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Belski said the dollar, along with the U.S. economy, is likely at a bottom and is set for a long-term bullish cycle. "We're back to the 80's and 90's again" in this regard, he said.

"The last dollar cycle trade was for nine years," he added. "The average weak dollar trade is for six years, so we could have a longer, stronger dollar trade this time around."

— By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street" @ToscanoPaul