Traders and investors overreacted in pushing the S&P 500 index down 2.7 percent last week, its biggest weekly fall in more than two years, says Dennis Gartman, publisher of The Gartman Letter.
"Let's not be panicked at this point," he tells
CNBC. "The market got a bit ahead of itself. . . . I'm going to turn back to being bullish again."
The 1,860 level will act as a near-term floor for the S&P 500, which would represent a 3.4 percent slip from Friday's close of at 1,925.15, Gartman explains, adding that he would "aggressively buy stocks" if the index slid close to 1,875.
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"Markets are driven in the short run by psychology, and markets are driven in the long run by fundamentals."
Dallas Federal Bank President Richard Fisher's comments early and late last week that the Federal Reserve might raise interest rates sooner than expected were the primary reason for the market's move, Gartman said.
Fisher wrote in The Wall Street Journal last Monday that the central bank should consider lifting rates early next year or sooner depending on the economy's strength.
Many economists don't expect the Fed to act until the second or third quarter of 2015.
"The Fed is not wanting to raise the short end of the curve for another year anyway. The long end of the curve was probably going to do reasonably better," Gartman notes. "The positive slope to the curve is something the Fed likes to see happen. They would like to talk about inflation to drop the back end of the curve higher and keep a slower curve intact, but let's all be calm."
As for stocks, some experts say the market's attention will return to earnings for now.
"This week there's not too much in terms of market-moving economic readings, so investors are likely to focus on earnings," Kully Samra, a client manager at Charles Schwab in London, tells
Bloomberg.
"Earnings have been ok. . . . The bar was set pretty low at the start of the season, so it gives companies an opportunity to outperform."
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