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This could be a big short opportunity: Ron Insana

If this week's choppy attempts at gains in the market don't hold, no doubt "da bears" will be coming out of winter hibernation, proclaiming that we just witnessed THE BIG TOP and that their five-year old calls for another crash will finally come true. I'd be much more concerned about the state of the stock market if so many pundits hadn't been calling for a top to end all tops for so long now.

Having said that, I have maintained, since last December, that 2014 is likely to be a transitional year, one in which we see a 10- to 20-percent correction in stocks which, when all is said and done, will be a pretty attractive buying opportunity. However, like many pullbacks in a secular bull market, this one may also be quite unnerving, as investors question the strength of the domestic and global economy, worry about the outcome of strategic geopolitical issues, the most important of which appear to be China's rapidly weakening economy and Russia's renewed imperialist tendencies.

Traders work on the floor of the New York Stock Exchange.
Getty Images
Traders work on the floor of the New York Stock Exchange.

Along with constant concerns about Federal Reserve policy which, as I discussed last week, will remain quite easy, despite misinterpretations to the contrary, these issues should, or could, be the catalysts necessary for an important pullback on Wall Street.

Read MoreYep, the Fed's new move is 'qualitative easing': Insana

In addition to fundamental issues that have arisen, which also include the quality of the upcoming earnings season, there are other reasons to be somewhat cautious about the current condition of the stock market.

I am becoming increasingly cautious on the stock market for a variety of reasons:

1. There has been some meaningful technical deterioration in the market.

  • Market leaders tech and biotech have become tech and bio-wrecks
  • The number of new highs has not broken out coincident with intraday all-time highs set last Friday in the S&P 500
  • The advance/decline line and up/down volume have not given extraordinarily positive signs amid the market's most recent rally.

2. There has been considerable froth in the IPO market, of late, often times a signature of a maturing bull-market move.

3. Economically-sensitive commodities like oil and copper are breaking down, while gold and silver are plunging; this could be reflective of deepening economic distress in China, Russia, India and other emerging-market nations.

4. The market is entering a seasonably unfavorable time for stocks — "Sell in May and go away."

5. Market valuations are admittedly stretched, though with inflation and interest rates at, or below, 1 percent, it's hard to say exactly what the "true" market multiple should be.

While I anticipate a nerve-wracking correction sometime soon, I don't believe it will spell and end to this secular bull market, as I suggested earlier.

Most importantly, it appears the European Central Bank, though badly trailing he Fed, is likely to launch a zero interest-rate policy and quantitative easing program to combat dangerously low inflation. I believe the Fed will remain "easy" longer than most expect, as well.

Important also, the fundamental improvements in the U.S. economy, in particular, will continue apace, as I outlined in my "Fortress America" piece a few weeks ago.

Read MoreU.S. poised to become the world's only superpower: Insana

Indeed, on a relative basis, the United States looks increasingly attractive, even now, when compared to everyone's favorite, China, or a host of acronym-laden markets, be they the BRIC countries, or the MINT countries (Mexico, Indonesia, Nigeria and Turkey). Unlike all of these, the U.S. economy is growing slowly, but steadily; the trade, current account and federal budget deficits are all declining and may turn to surplus within just a couple years; the energy revolution is growing stronger while recent statistics show that manufacturing, and employment in that sector, are now showing measurable signs of improvement.

Interest will remain quite low for the foreseeable future while inflation (and I'm not talking about weather-related spikes in agricultural sector), will remain muted.

This week will likely see a virtual parade of bears who will say "I told you so," and that the market is about to crash "for real," as if the collapse in 2008 was a walk in the park. Short-seller, Bill Fleckenstein, kicked it off earlier this week, calling stock prices, "absurd."

Read MoreStocks have become 'absurd': Bill Fleckenstein

We've had two crashes since the year 2000, we are not due another one in the absence of true bubble-like conditions.

This could be the start of a very nasty pullback.

For long-term investors, dollar-cost average into your favorite stocks, or indexes, but keep your emphasis on U.S.-based investments.

For traders, this could be a big short, but not THE big short ... that trade came and went from 2007 to 2009 and from 2000 to 2003.

I have rarely missed a real bubble like the ones we have seen in the past. I don't believe this bull market is ending its five-year run, but I do believe it will pause to take a very deep breath.

It may be time for us to do the same, but all the while remembering that another running of the bulls should start later this year.

— By Ron Insana

Ron Insana is a CNBC and MSNBC contributor and the author of four books on Wall Street. He also delivers a daily podcast, "Insana Insights," and a long-form weekly version, both available on iTunes and at roninsana.com. Follow him on Twitter @rinsana.

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