The S&P 500 index may have slipped 4.3 percent from its record high Dec. 29 to Tuesday's close, but that doesn't mean the market's six-year rally is coming to an end, says stock market guru Laszlo Birinyi, president of Birinyi Associates.
"I'm not really surprised that we have this situation, because I think we underestimated the event. I don't know what's going on with oil," he told
Bloomberg. Oil prices have dropped 55 percent over the last six months, hitting a 5 ½-year low.
But "I'm still of the view that we're in a bull market, and you're going to have periods of interruptions and detours."
The S&P 500 already has started rebounding.
But that doesn't mean Birinyi is ready to jump in and buy yet. "I think you still have an event going on [the oil price drop] which is going to continue to weigh on the market," he said.
"In a situation like this, I want to have a little more clarity and be a buyer on the way up rather than to be a buyer hoping to catch the bottom."
Last year, the S&P 500 index experienced no decline of more than three consecutive days, and the CBOE Volatility Index (VIX) hit a seven-year low in June.
But the oil prices plunge and the dollar's rise to multi-year highs against a range of currencies have upset the apple cart, says Mohamed El-Erian, chief economic adviser at Allianz.
"Put these two things together, and they threaten the low-volatility paradigm that markets have enjoyed and that central banks have delivered," he told
CNBC.
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