Banks stocks have risen too much already and are due for a correction, possibly pulling the whole market down, while optimism about a recovery is not complete, strategists and investors told CNBC Friday.
"The financials have been held up by little more than vapor over the past weeks," said Christian Thwaites, president and CEO of Sentinel Asset Management. "We're sort of waiting for a pretty big selloff to come."
The sale in financial stocks will then spread to the rest of the market, Thwaites added, in comments to "Squawk Box."
"I agree that the market is overstretched here," Lou Brien, market strategist with DRW Trading, also said. "We've done what we have done in the past and really nothing more."
Analysts have pointed out that even during the 1930s Depression there had been stock market rallies, but overall the stock market had fallen.
Rally No Surprise
Trillions of dollars were pumped into the financial system everywhere in the world, so the rally over the past few months is not surprising, Tony Crescenzi, senior vicepresident and strategist at Pimco, said, adding that investors don't see a "tremendously rosy picture."
"People have the sense of optimism now but I don't think it's a complete sense of optimism," he said.
If people were more optimistic, the 10-year Treasury yield would be higher, as investors would believe the economy has recovered and the Federal Reserve will start raising rates, according to Crescenzi.
The 10-year note's yield - which currently stands at 3.5 percent - should stand at around 4 percent if optimism was strong, he explained. However, Crescenzi's view of the economy and the markets was not as gloomy.
"We won't see the so-called W," he said. "Just a little pullback and steady, very slow growth."