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Strategist Tom Lee: 'Buy the dip' because the S&P could rally 17 percent in 2019

Tyler Clifford

Stocks are poised for double digit growth in 2019 — and could potentially jump as high as 17 percent, Wall Street strategist Tom Lee said Friday.

"The buy the dip, which people thought died last year, is back," the Fundstrat Global Advisors co-founder and head of research said on CNBC's "Fast Money: Half Time Report."

"The probability of a double-digit year we think is the highest since 2009," added Lee, who is also the firm's head of research.

In his latest investor note released Friday morning, Lee predicted the S&P 500 would hit 2,835 by the end of the year. That would be a 13 percent increase from where the index finished 2018.

Lee acknowledged in his note that "contrarians were slaughtered" last year. In mid-December, after a late-year collapse in stocks, he told CNBC there was still time for the S&P 500 to catch a 10 percent rally going into 2019 .

However, the stock market actually fell further into the red, with the S&P 500 hitting a 2018 low of 2,346 during the Dec. 26 trading session. Since that intraday low, the S&P 500 has gained more than 10 percent based on Wednesday's close. The index was up 3.5 percent year-to-date.

"The crash of 2018 mirrors the mid-life crisis seen during the middle of bull markets a la 1962 and 1987," Lee said in his note. In both those cases, he argued, the bull market found its footing at the 200-week moving average, which currently is "2,350 or so" on the S&P 500.

"Is a retest in 2019 possible? Yes, but if so, we would view that as a buying opportunity," he wrote.

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