Dow to 21,000 by April, and Tax Cuts by Mid-Year? Price Headley Talks to CNBC.

Has the Trump trade been overdone? It's a question worth asking, with the Dow Jones Industrial Average up 10% since Donald Trump was elected President, and more suspiciously, having (mostly) stalled since early December.

BigTrends Chief Analyst and President Price Headley thinks the answer is yes and now, depending on your timeframe. He explained to CNBC's Street Signs on Wednesday "I think you could make the case that we're already digesting that [the significant gain in the meantime] because the market's been in an incredibly tight trading range.  Basically, we haven't had a 1% move here in the U.S., up or down, in the overall market in something like the last month and a half. What you have is a sideways digestion phase."

Headley's not convinced the Trump-induced gains weren't merited simply because the big runup led to a clear pause. He added "Obviously there's a lot of good news that's happening. We've had 74% of companies in the S&P 500 beating earnings expectations. The one and only caution there would be that only 47% of them are beating their revenue expectations. At the same time, what I care about is, are those stocks going up on the news more than they're going down? I think we've had more good reactions than bad." Headley reiterated "So, I think this is actually a healthy reaction to have this digestion phase. It was a monster two-month rally where a lot of people were caught flat-footed. So, this [the recent stagnation] is a very healthy thing. I think we're going to a lot higher on the Dow. I think 21,000 will be reached before we get to the end of April."

The Dow is currently trading at 20,150, just two weeks after it cleared the pivotal 20,000 level. If the blue chip index does indeed reach 21,000 by April, like the trip from 19,000 to 20,000, it will be one of the faster 1000-point moves Dow Jones Industrial Average has ever made.

To the extent a clear reform to tax policy is necessary to spur that gain, the market won't get it. President Trump and his team had alluded to an overhaul of the tax system -- and specifically, a lowering of all tax rates for all corporation and individuals -- for this year, although more recently it looks like that overhaul will be delayed until next year.

Hope of tax reform in the near future, though, may be enough to keep the bulls buying. Headley also offered a reason to at least be optimistic in that regards, saying "There were actually some Republicans in the U.S. Congress actually claiming there will be meaningful, substantive, reform by mid-year and that it will actually be revenue-neutral. Those are pretty bold claims not just on timing but also on impact as it relates to the projections that tax cuts could make the government deficit that much worse. I think tax cuts could be a very healthy thing for the economy."

You can view the video clip for yourself here.