Investors 'stay put,' says one market watcher

Money to be made
Money to be made   

It's been a roller coaster ride for U.S. markets this past week, but the dip could soon end, said Jurrien Timmer, director of global macro at Fidelity Investments, in a CNBC interview.

Major stock indicies are sharply lower since the beginning of the year amid heightened concerns about China growth and falling oil prices.

"I think we're setting up for a very good opportunity, a sort of a v-shaped bottom, if you will," Timmer said. "We're still in the falling, catching the falling knife mode at this point."

So should a long-term investor try to get in on the action? Not so fast.

"If you're a regular investor, you kind of stay put here," he said. "If you're a long-term investor, this is not time to be selling or trying to pick bottoms."

Instead, investors should wait for smoother roads ahead. Opportunities lie specifically "not necessarily in the overall S&P 500, but in those really beaten down areas like emerging markets, equities, commodities, high-yield credit," Timmer said.

"The question is, is it going to be tomorrow or three months or six months from now?" Timmer said of a rebound.

In looking at what's behind the volatility, Timmer said it all boils down to the relationship between the yuan and the U.S. dollar. As China moves to devalue its overvalued currency, U.S. liquidity markets suffer.

"As [China] does that, it needs to intervene and draw down its foreign exchange reserves. and if you do that by 100 billion a month, that's like global tightening," said Timmer, "That's a transmission effect."

The effect of this swings U.S. markets, hitting earnings in the oil patch and in the material sector, and thus bringing down earnings for the overall stock market here in the U.S.

This back and forth will continue, but the upswing side of the U.S. market's V-shape could should be coming soon, Timmer said.