Stocks haven’t hit a bottom just yet: Traders

Following a two-day selloff last week, Monday's market opened into a deep dive with the Dow Jones industrial average, S&P 500 and Nasdaq Composite all losing 5 percent or more in early morning trading.

By midday, stocks had pared some losses, but closed down almost 4 percent. And according to some traders, a bottom for the S&P 500 is still ahead.

Chris Verrone, technical analyst at Strategas, said although there are signs of overselling, investors shouldn't use this as a buying opportunity just yet.

"This decline is only tjhree days old," he said Monday on CNBC's "Power Lunch." "I still think it's wise to stay patient; I still think it's wise to wait here."

Read More Dow off about 600 points in choppy trade, still off session lows

Verrone said the market is also facing seasonal weakness for the next month or so, and could see another pullback in the coming weeks. He said he is waiting to see more signs of stabilization, but there could be a short-winded bounce before then.

"Any rally that we are likely to get in the short term is probably not the real, good, tradeable low," he said.

And although Erin Gibbs of S&P Capital IQ said the stock valuations are getting more reasonable, she wouldn't consider stocks cheap just yet.

"We don't see any signs in other markets that we've hit the bottoms," she said Monday. "We haven't seen that complete slowdown just yet."

Read More Gundlach says US equity markets face another major leg down

Gibbs said investors should wait until the S&P's price-to-earnings ratio falls to 15 times forward earnings, or around the 1,800 level. Currently the S&P is trading at 15.63 times forward earnings, according to FactSet.

"That would be a place that we would see real value," she said.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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