Here's why I'm still shorting this market

After Monday's rebound in stocks, I wondered if I'd erred in my decision to short the stock market. But Tuesday's action confirmed my decision to go short. I'm planning to stick with the position until some real signs of a market bottom take shape.

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

I believe we are in the early innings of a market correction, within the context of a secular bull market. As a consequence, I still own puts on the S&P 500, with a strike price of 1850, expiring in September.

When I decided to short the market last week, I did not intend it to be a day trade, but a trade that protects against a near-to-intermediate-term move in stocks. I still believe the market remains vulnerable to a decline of 5 percent to 10 percent — or more.

Read MoreByron Wien sees bull-market correction in stocks

The character of this selloff is different than the rotational correction we witnessed in February and April, and appears to be more broad-based now. At the start of the year, I was looking for a 10 percent to 20 percent pullback, based on the assumption that improved economic numbers would lead to fears that the Fed would pull forward the date by which the Federal Reserve begins raising interest rates.

That was a fear deferred. Declining GDP in the first quarter amid a (mostly) weather-induced slump, forced investors, and the Fed, to re-calibrate any move on rates, though the tapering of quantitative easing continued apace.

The stronger data we have seen recently is clearly forcing another recalibration of Fed policy, as various short-term interest-rate futures have begun to price in an earlier tightening schedule, and completion of the cycle by the end of 2016, as time compresses quickly in the rate futures market.

Add to that, renewed concerns of a Russian invasion of Ukraine, an Ebola scare (which I think is greatly exaggerated in the U.S.), and the market swooned.

Read MoreCramer: As Cold War heats up, unexpected ripples

Oddly, and unlike, prior selloffs, bonds, stocks and other assets are falling in tandem—a sign of market turmoil. Despite apparent or perceived threats by Russia to restrict airspace for western airlines (costing them more in fuel expenses and a rumor that surfaced yesterday), oil is falling and the dollar strengthening. Seems an odd combination of events, at least in the context of recent history.

And wile many desire a stronger dollar, it should remembered that a stronger dollar is a form of tightening in and of itself.

A stronger dollar dampens imported inflation pressures and acts like a mild rate increase as it happens.

I plan to stay the course with my short position for several weeks to come.

Read MoreThis is the bullish signal we've been waiting for

I believe stocks are in a secular bull market and once conditions for an investible bottom emerge, I will redeploy capital. I will buy back my favorite stocks, at discounted prices, once they have corrected.

Commentary by Ron Insana, 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 Follow him on Twitter @rinsana.