With the major indexes trading around record highs, BTIG's Julian Emanuel is drawing a parallel to another euphoric time: 2000 dot-com bubble top.
According to Emanuel, the market rally's intensity over the past six months mimics what Wall Street saw 20 years ago.
"The participation is on a par with 2000, if not greater," BTIG's chief equity and derivatives strategist told CNBC's "Trading Nation" on Monday. "It's pushed valuations to an equivalent level to where they were in 2000."
Despite his discouraging comparison, Emanuel believes the current backdrop is more conducive for sustainable gains with companies delivering real revenues to investors.
"It's a totally different interest rate environment, and there's a lot of cash on the sidelines. That wasn't necessarily the case," Emanuel said. "And if anything, the economy is waiting to accelerate, which we think happens on a global basis in 2021."
Emanuel believes the worst thing that could happen is a 10% to 15% pullback. He speculates that the most-likely catalyst to spark a correction would be related to the coronavirus vaccine and distribution. He also believes the fallout would be temporary.
"We're not looking for anything terribly dramatic on the downside," he said. "Given the backdrop of monetary and now fiscal accommodation and accelerating earnings, we think that would be a buying opportunity."
Emanuel sees economically sensitive stocks as winners in 2021, with financials topping his list. He cites economic reopenings, potential for higher inflation expectations and Federal Reserve policies.
"In an environment where the Fed has blessed banks for turning capital, we think that sector is under-owned, very attractively valued and has substantial earnings power," Emanuel said.
He believes banks will help the S&P 500 achieve his 4,000 price target for the end of next year — a 7% gain from Monday's close.
"This far into the bull market, you take it in chunks of six to nine months," Emanuel said. "Looking forward nine months, and when we look forward, we do see higher prices even if you do get the pullback."