Jeffrey Gundlach Explains Why The Market Is Stuck In No Man's Land

Jeffrey Gundlach is the co-founder and CEO of DoubleLine Capital. On Friday, he was a guest on CNBC's "Halftime Report" segment to explain why he believes the stock market is stuck in no man's land.

Gundlach said he is taking a wait and see approach for the stock market at this point. He noted that when the market saw two closes above the 2,130 level in the S&P 500 index, it was immediately followed by nine straight days of declines, ultimately culminating in a crash in the overseas market when it was apparent President-elect Donald Trump won the election.

Buying Opportunity Followed By No Man's Land

However, this crash turned out to be a great buying opportunity, but as it stands now, the market is stuck in no man's land.

He suggested that the S&P 500 index will be stuck between a floor of 2,100 and a ceiling of 2,200, and the market is stuck in the middle. As such, the investment pro is looking for the market to "prove itself."

Specifically, if the S&P 500 index closes above the 2,200 level a few times, then the bulls are right. On the other hand, a few closes below the 2,100 level shows that the bears are in control.

With that said, Gundlach stated if investors think the market is cheap at its current level, then it is also cheap at the 2,200 level. Therefore, investors should wait until then to buy stocks.