Charles Schwab’s Liz Ann Sonders remains optimistic on the economy and stock market, though she expects a near-term pull back — and says investors should be cautious about emerging market stocks.

“We’ve been optimistic about the prospects for the market for some time and continue to believe the general trend of the equity market will be higher,” Sonders, Schwab’s Chief Investment Strategist, writes in her latest market commentary (along with Schwab’s Brad Sorensen and Michelle Gibley). “However, we expect, and would like to see, a pullback in the near term as some technical and sentiment indicators are getting to levels indicating we may be stretched.”

Sonders, Sorensen, and Gibley add that “a bit of a retrenchment could set the stage for the next run higher.” While they see signs the U.S. economy is improving, they also think the Federal Reserve’s latest round of quantitative easing may have negative consequences.

The trio say they are still “bullish on the emerging market story longer term, but are becoming uneasy about the one-sided nature of this trade where even famed value and bond investors have positive views on this asset class.” Currently, they don’t see a near-term trigger that would halt emerging market momentum, but spiking inflation and aggressive tightening, or a surge in the US dollar, could do the trick at some point, they say. “New investments into this asset class should be made cautiously, using sell-offs for entry points,” they write.