Market's violent moves will set stage for a massive comeback, Wall Street bull predicts

Market bull Art Hogan is looking beyond the trading week's rough start.

The National Securities chief market strategist expects the violent moves will set the stage for a massive comeback that will prompt him to hike his S&P 500 year-end target.

"Here we are with everything for sale in a risk-off mode. People piling into the Treasurys," Hogan told CNBC's "Trading Nation" on Monday. "Likely, all of that gets stretched."

The Dow saw its worst day on Monday on jitters associated with Covid-19 Delta variant risks. The S&P 500 and tech-heavy Nasdaq saw their biggest drops since May. Plus, the benchmark 10-year Treasury Note yield slid to 1.17%, a five-month low.

"This is a blip on the radar screen," Hogan said.

Hogan believes a 5% to 10% drawdown is unfolding. But he emphasizes it would be par for the course.

"We have a 5% drawdown every year on average. Often we have a 10% drawdown on an annual basis," noted Hogan.

In this environment, he's encouraging long-term investors to be equal-weight growth and cyclical names. He has had the strategy going back to the early days of the pandemic.

"If you rebalance that every two months and keep that barbell level, I think you're going to outperform the S&P 500," he said. "You did last year, and you likely will again this year."

On the growth side, Hogan likes 5G, cloud security and cloud computing. He likes financials, energy, industrials and materials best among cyclicals.

Hogan, who oversees $20 billion in assets under management, acknowledges Covid-19 risks are growing. But he doubts it will spell extreme restrictions and a significant slowdown in economic growth.

"We've got a very short-term memory and very well-toned memory muscle towards [Covid] increases," he said. "This current wave will likely peak and we'll get back to focusing on things we should be focusing on like great earnings growth."

Hogan predicts second quarter earnings season, which is underway, will solidly exceed Wall Street estimates. If they do, he expects to boost his S&P 500 year-end target of 4,400, a 3% increase from Monday's close.

"There's plenty of upside in this market. Volatility is part of that process," Hogan said. "Remember, this is an economy that's just starting to reopen and these are consumers that are just starting to get back to getting active."

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