Why Won't the Stock Market Panic Already?

In the meantime, aggressive investors will continue to try to make money, and for some that has meant short-selling.  While there appears to be at least a somewhat growing sentiment that the shorts have had their day, Rosen and Ianieri believe the market still has room to tumble.

Ianieri, who has been aggressively shorting the market since it came off its March lows, says there's still too much detritus amid the markets and the economic picture to encourage the kind of trading that indicates capitulation.

And he said that when you take a good look at the big picture, stocks are right around where they should be, perhaps even higher as he remains committed to at least some of his short positions.

"We've had a huge divergence, where the economy was showing you there were problems here and the market traded against those problems and ignored those problems," Ianieri says. "You have get to get to the point that what's going on in the economy is reflected somehow in the market."

The apathy of investors in the summertime doesn't help either.

"We've not seen the capitulation yet and this week's going to make it very difficult because so many people have already taken off for the Hamptons," says Peter Miralles, president of Atlanta Wealth Consultants. "People go on vacations in the summertime. Markets for one reason or another tend to react historically in August and September. I guess that's more of a reason why September tends to be the worst performing month of the year."

Miralles believes the short trade has come and gone, and he is banking that oil and other commodities, particularly minerals, will continue to be the bulls that will offset the stock bears.

He looks to the second-quarter earnings season as holding the key to when capitulation will come.

"We've got to get through some earnings here. We need to get some of these writeoffs written off," Miralles says. "The financials are going to be a fantastic bargain once they've had major writeoffs on their book values."

To be sure, both Ianieri and Rosen point out that markets never go straight down, and both see a bear rally coming for stocks.

Rosen pinpoints a low in the cycle to hit July 10, at which time the Dow could get a nice bump of 800 to 900 points heading into August, when things again will deteriorate and blow out in September to a point where the Dow could see 9,500 or even lower.

If that combines with a collapse of another major Wall Street bank, that could be the point where investors finally hit full-fledged panic mode.

"At some point some of these banker-brokers are going to bite the dust and that certainly is going to freak people out," Rosen says. "I think we're still not quite there yet."