Stay skeptical of a market that has bounced hard from the correction lows notched earlier this month, says one investing sage. 

"I think everyone is assuming the markets are roaring back and that the correction is over and we are going back up to new highs again, I am a little skeptical of that," Byron Wien, 86, told TheStreet. Wien, Vice Chairman in the Private Wealth Solutions of Blackstone Group (BX) - Get Report , has lived though all sorts of market cycles during his storied career on Wall Street. So suffice it to say, assessing this latest correction isn't his first rodeo.   

TheStreet talked with Wien about what's next for the markets after the correction...and subsequent rally. We also checked in on Wien's widely followed annual "10 Surprises" for the market, with this year's predictions being released in the first week of January (when the market was melting up). What follows is an edited and condensed version of the interview.

TheStreet: What's next for the markets?

Wien: I think everyone is assuming the markets are roaring back and that the correction is over and we are going back up to new highs again. I am a little skeptical of that. I think we had a euphoric market and we had a correction, and it's very common after a 10% correction to have a rally. I think we will test the lows again.

TheStreet: What is driving some of your skepticism?

Wien: We have more evidence that interest rates are rising, that inflation is going to be more of a problem. Average hourly earnings are increasing. I think commodities prices are going to be increasing because of world growth. I think we will have more talk about inflation. The bond market rally that began in 1982 is over. So interest rates are going to be rising.

I think all of this will be tough for the stock market. The Fed will be tightening. The European Central Bank will be tapering. So, there will be a less accommodative monetary policy environment.

I still think the market will end the year higher than we started, I just think we will go down and test the lows again.

TheStreet: How do you balance what looks to be a good outlook for corporate earnings with some of the things you are talking about?

Wien: Well, that's why I think the market is going to be do better in the second half of the year. People were investing in equities with impunity. They thought there was no risk. The correction taught them that there is risk. I don't think they fully learned their lesson though. Now that the market has turned around so sharply, everyone is complacent again. I think they have to have some of that complacency beaten out of them.

Wien: How do you think the Fed will be different under Jerome Powell as opposed to Janet Yellen?

I think both Yellen and Powell have a desire to normalize interest rates, which would mean doubling them from current levels. Yellen went very slowly toward that goal because she was worried about upsetting the stock market. I think Powell will be more aggressive. I think he has a better economy to deal with, so he will be more aggressive in raising rates.

TheStreet: Is the market paying enough attention to the Republicans possibly losing control of the House and Senate?

Wien: No, absolutely not. The market thinks Trump will be in office forever. And that he will repeal the two-term thing and serve for the next 20 years.

TheStreet: How are cryptocurrencies viewed within the investment banking community?

Wien: I think if you are an older person like I am you are very skeptical. If you are a younger person, you have a better understanding of blockchain technology and you see the possibilities. The real worry I have is that there could be 100 bitcoins and there is no central banking.

TheStreet: What tips would you give the average investor watching the stock market suddenly bouncing around all over the place?

Wien: They should pay a lot of attention to their conviction about the earnings growth rate and the multiple they are paying. They should have a firm valuation discipline and when stock prices get beyond that, they shouldn't be buyers. They shouldn't buy on the surge in the market, they should buy on the value of the underlying entity.

TheStreet: Before I let you go, what are your thoughts on algorithmic trading? Growing risk to markets?

Wien: I think algorithmic trading accentuates the movement of the market in both directions. When the market is surging upward, you have to be skeptical. When it's collapsing you have to be opportunistic.

Check out another big interview below by TheStreet with Coca-Cola (KO) - Get Report CEO James Quincey.