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Stop fixating on the Fed: Analyst Dan Fitzpatrick

Investors should forget about what the Fed does and instead focus on market prices, analyst Dan Fitzpatrick said Monday.

In an interview on CNBC's s "Squawk Box," Fitzpatrick said he is getting fatigued with the fixation on the Fed. Fed Chair Janet Yellen will issue a statement on Wednesday that investors will be watching for signs that the central bank will raise interest rates.

"Generally speaking, maybe it's not politically correct to say it, I don't think they have a clue what they're doing," said Fitzpatrick, president of Stockmarketmentor.com.

While a growing number of stocks are trading in bearish territory, the market has not necessarily topped out, he added.

The McClellan Summation Index measures the long-term health of markets by comparing advancing and declining stocks. Currently the index is trading below its midline, indicating that beaten-down stocks are not rebounding very much.

Fitzpatrick noted that while the S&P 500 has been trading in a wide range, the peaks and valleys have remained relatively stable and defined. He takes that as a sign that prices are not set for a pullback, but merely consolidating.

Read More The Fed could put the brakes on the dollar rally

"This is what prices need to do, and they need to do this on a regular basis. As the volatility wanes ... these prices will stabilize in lower ranges," he said.

At that point, traders can look for the next move higher, he added. In the meantime, investors should not buy stocks in decline because the McClellan Summation suggests they are not rebounding yet, he said. Instead, they should own stocks that are still working and be selective about new investments.

Volatility is cyclical, Fitzpatrick said, and is currently driven by the weakening euro due to the European Central Bank's recently launched stimulus program, oil prices that cannot find a bottom, and uncertainty over Federal Reserve monetary policy.

Read More Why investors shouldn't fear a Fed rate hike

—CNBC's Toby Taylor contributed reporting to this story.