Strategist: Dollar and technology stocks are likely to hit new highs

In the fourth quarter, stocks have surged 9 percent from their lows and are now on their path to hit record highs. Meanwhile, one strategist says there are two areas which will inevitably win.

"The U.S. dollar and the Nasdaq composite are the only two markets in pure bull mode," Rick Bensignor, chief market strategist at R.F. Lafferty, said in an interview with CNBC.

In order to gauge the market's strength and weakness, Besignor uses what he calls a "cross-asset bull market location model." He explained that it covers 10 different markets ranging from U.S. equities to commodities, bonds and emerging markets. The model compares each asset's current price to where it was two and six months ago.

Commodities and emerging markets are the sources of most worries, Bensignor said, while the greenback "has been solid and obviously the Nasdaq is much stronger than the S&P 500, and they've both been in bullish mode for quite some time."

The dollar has surged more than 25 percent since May 2014 as investors await a rate increase from the Federal Reserve.

Meanwhile, the Nasdaq composite has been buoyed by the outperformance in biotech and tech stocks, and it surely affects the S&P 500.

"But it's the weighting of the indices and how they actually calculate; the S&P just doesn't show up as well."

Besignor noted that in order for the S&P 500 to advance, it must hold above the 2,090 level for the next week.

"If we were to stay above 2,090 that would kick the S&P 500 into bull market mode, but generally we want to see multiple weeks in a row of that signal showing up in order to enter a trade," he said, adding that it needs durability for these signals to emerge.

The last time the S&P 500 was in clear bull market mode was in mid-July, he said, but it lasted just one week. Before that, the gauge saw a two-week run in May and a three-week run in February. It lingered for six weeks in fall 2014.

On Friday S&P 500 closed 0.03% lower while Nasdaq composite was up 0.38%.