Investors may want to keep the antacid nearby.

Long-term market bull Tony Dwyer sees near-term turbulence in connection with his “summer of indigestion” call. So, he’s encouraging investors to resist making any big moves right now.

“We’ve had one heck of a run. It’s been an excessive run in the indices,” the Canaccord Genuity chief market strategist told CNBC’s “Trading Nation” on Tuesday. “Typically when it’s this kind of indigestion beneath the surface of the market, it eventually comes out into the indices themselves.”

The major indexes just broke a two day win streak. But the S&P 500 and Nasdaq hit all-time highs during Tuesday’s session. Plus, the Dow is off just 0.58% from its record high.

It may be hard for some investors to swallow, but Dwyer believes a summer setback is virtually unavoidable. He points to a period of transition in monetary policy, fiscal policy, the economy and earnings.

“Everybody is talking about peak everything. But that’s what happens at this point of an economic recovery,” said Dwyer. “It’s what happened in 2004. It’s what happened in 2010.”

Dwyer has been sitting on the sidelines for months due to the backdrop. He downgraded the market to neutral in April.

“We’ve been in the summer of indigestion really since the end of March when rates peaked,” he said. “Even though the S&P 500 and the Nasdaq are making new daily highs, the participation in them is much lower.”

But Dwyer sees a significant dip as a major buying opportunity.

“The summertime of indigestion is going to create year-end opportunities,” said Dwyer. “We look to add our exposure back into the market from a neutral position on even more of this indigestion.”

‘You just want to wait for an opportunity’

Dwyer plans to pounce on stocks again on broad market weakness.

“You just want to wait for an opportunity,” he noted. “Buy into those areas that are exposed to an economic recovery.”

Tops on his list: Financials, industrials, materials and energy.

“They were all really seeing excessive runs to the upside,” he said. “You’ve given back all of the relative performance gain in those four sectors over the last few weeks.”

Dwyer expects more weakness during the dog days of summer. However, he expects a dip to set the stage for a strong bullish run into year end.

“Last summer, we were very positive on the economic recovery theme and pulled in our horns on that in mid-April,” Dwyer said. “[Now] You don’t want to get too positive and you don’t want to get too negative.”


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