Market strategist Tom Lee thinks investors trying to read the Donald Trump tea leaves should focus on one word: deregulation.

As Wall Street busies itself with if and when the president delivers on his promised tax cuts, Lee said Trump's efforts to loosen rules that govern business will create better opportunities.

"I don't think anybody is going to make money trying to look at tax opportunities," the managing partner and head of research at Fundstrat Global Advisors said Wednesday at the Yahoo Finance All Markets Summit in New York. "Deregulation is your biggest lever to pull."

As an example, he pointed out that added regulatory burden has cost the financial sector $55 billion over the past eight years, while four regulations alone have cost the tech sector another $30 billion.

During his campaign, Trump promised to roll back regulations, and he already has delivered. He has declared what amounts to a moratorium on new measures.

'Policy gridlock developing'

Normally one of the market's most avid bulls, Lee is advocating caution this year. New presidencies often see a drawdown in the market, and Lee thinks a 5 percent or even 7 percent pullback would be fairly consistent with historical norms.

"There's some policy gridlock developing. The bond market is confused," he said. "That explains what happens after an election year."

His investing strategy this year focuses on the acronym CRAP — computers, resources, American banks and phone servicers.

Lee's fellow speakers at the conference agreed with his skepticism on the market, at least in terms of it being a "choppy" year ahead.

"We priced in a lot of good news, and it's going to be choppy," said Michelle Girard, managing director and chief U.S. economist at NatWest Markets. "The speed of getting clarity to companies and individuals on the tax plan is key."