(This story is for CNBC Pro subscribers only.) Tom Lee, one of the Wall Street strategists who called the market comeback following the coronavirus-induced sell-off, said the market is about to send a powerful buy signal to investors. Fundstrat's Lee said market participants will be soothed and motivated if the Cboe Volatility Index , a measure of investor fear, drops below 20, a level not seen since before the Covid-19 pandemic. "In our view, a move < 20 would be a major risk-on signal, as it would suggest that investors see lower volatility in the coming months," Lee old clients on Thursday. "In other words, this would be more firepower to buy equities." The VIX —where currently sits around 24 —has had a wild ride this year due to the economic fallout of the Covid-10 pandemic. The measure of market's anticipated volatility spiked above 82 in March during the fastest bear market in history. However, Lee said improving virus news could push the index below the key 20 level and unlock powerful momentum from equity investors. "This would be quite a change for much of 2020. And if so, a drop in VIX would also suggest investors would not only be more 'risk-on' but we could see a risk on investment leverage as well," said Lee. Most notably, Pfizer and BioNTech's 90% effective vaccine is a great buy signal for stocks, he said. The Dow Jones Industrial Average is up more than 3% and the S & P 500 is up 1.5% this week as investors rotate into cyclical stocks that hinge on economic recovery. Lee also noted that although daily Covid-19 cases are hitting record levels and will get worse into the winter, the mortality rates are improving from the spring and summer months. Lee said the world could reach some type of herd immunity in 2021. Following amid Monday's 800-point Dow rally, Lee told CNBC the move was just a "baby step" for the markets. Lee said he could see a 10% rally in stocks, led by the so-called epicenter stocks, those most beaten down by the pandemic. Broadly speaking, the four sectors are consumer discretionary, energy, industrials and financials. "I think this is only one quarter, even a tenth of a step, in what kind of move we could see once the economy gets moving. It's a great day for epicenter stocks, but I actually think it's a baby step in front of what could be a much larger move," Lee said on Monday. Take a look at Lee's list of "trifecta epicenter stocks." The list is made up of a handful of beaten down travel stocks, retailers and regional banks, among others.
