Chris Harvey's reign of the year's largest bull will not continue into next year.
Head of equity strategy at Wells Fargo Securities, who has a target S&P 500 for 2021 of 4,825, believes Wall Street will see a strong year-end rally before then seeing a loss in 2022.
"You're going bring equities up to a point that they can't sustain. He said that the equity market will be in meltdown on Friday's CNBC's Trading Nation. "We will bring stocks to a point where their fundamentals and valuations aren't supported."
The week ended in record territory for the S&P 500 and Nasdaq. The S&P 500 and Nasdaq saw a 7% increase in October, while the Dow experienced a 6% increase.
"What we are seeing is that investors and individuals feel the market is invincible at this time. There have been many pullbacks. Harvey said, "You've bent it but never broken." Harvey said that this brings with it another level FOMO (fear of missing out), and that adds a level to your confidence.
Harvey cites strong economic fundamentals and better-than-expected earnings as the fuel for his gains.
He said, "It's too late for the bull market." "Now is a time when irrationality is much more rational. Things that you didn't anticipate can happen and they most likely will.
Harvey believes momentum names (which include banks) will be key drivers in the year-end. Harvey calls financials "stealth leadership" and believes it will gain traction from taper plans by the Federal Reserve.