Paul Schatz, Heritage Capital President, predicts markets will re-test lows before heading higher.

And he told CNBC that it's actually a good thing.

He told Melissa Lee this may mean a drop in the Dow below 15,000, using charts to illustrate.

The Dow Jones industrial average was up 138 points, or 1 percent, to 16,490 as of 12:10 p.m. Eastern time Thursday.

Meanwhile, Kelvin Tay, a Managing Director at UBS, made an outlier prediction by saying that the Federal Open Market Committee (FOMC) will makes two rate hikes by the end of this year, which he notes would be the first rates hikes in 11 years (most commentators say nine, but why quibble?).

Tay worries that now that the market has come to expect that “low interest rates are here and to stay here forever,” the Fed is going to hike rates, but he told Martin Soong that he doesn’t think these actions will do any damage.

Prompted by Soong, Tay clarified that after two hikes this year, he expects 25-basis-point hikes quarterly next year, to which Soong responded, “Wow!”

David Bahnsen, of HighTower Bahnsen Group, observes that upward volatility has been more “euphoric” than “normalized,” and he expects high volatility to continue “for at least a few more weeks” and give the markets a chance to react more normally to third quarter earnings.

As for when the Fed will raise interest rates, Bahnsen predicts only token action until after the election. Rajeev DeMello, of Schroders Investment Management, thinks that inflation and financial stability indicators will lead the Fed to hold off on raising rates and will be “incredibly gradual.” He added that he thinks the Fed will begin to reduce its $4 trillion balance sheet. Readers may recall that Peter Schiff has predicted the opposite, and this writer agrees with Schiff.

Quincy Krosby, Market Strategist at Prudential Financial, points to action scheduled for today by the ECB and later by the Fed and contends that, “When central banks are so heavily involved in financial markets, it can actually alleviate the volatility that typically can last for a while.” She welcomes the current pullback as part of the process of “normalizing” markets but warns the lows may be tested.

The Fast Money traders kicked around the “one-and-done” theory of Fed action, with all of them talking at once, and then Brian Kelly suggested that even one rate hike is too much, and “the data’s probably going to be getting worse over the next three months.” This brings back the question of why anyone would think that the Fed is going to raise rates in an election year.

Mary Thompson alerted viewers to a Reuters report that Bill Ackman’s Pershing Square hedge fund ended August down 9.2% for the month, but had been down over 13% and is close to even for the year. Some other prominent fund managers were also down for the month. This writer has suggested that Fed Chair Yellen can be expected to intervene to help managers perform this year.

SEC Commissioner Dan Gallagher took the opportunity to reassure investors of “the greatness of the US capital markets” and the SEC is an “expert capital markets regulator” capable of looking at tons of data on last week’s market activity and drawing “dispassionate” conclusions on ETFs.

Finally, Kevin O’Leary, of Shark Tank, and Eric Schiffer, of Patriarch Equity, engaged in a classic debate over whether investors should look to dividend-paying stocks as a refuge in a volatile market by focusing on free cash flow or whether such stocks are more likely to entice investors to make bad bets on badly managed companies. O’Leary argues that 71% of performance over that last five years came from dividends. CNBC’s Carol Roth sided with O’Leary, but the debate served as a useful pause for investors adjusting to higher volatility.