Is the bull market back? Not so fast: Insana

After Monday's wild ride, some are suggesting that the stock market has experienced the type of capitulation that marks the beginning of a stock-market boom.

The Dow, S&P 500 and Nasdaq on Monday dipped into correction territory, meaning down more than 10 percent from their most recent highs.

Corrections, unlike bear markets, are short, sharp and scary. The recent action certainly meets those criteria.

Read More Stocks up about 2 percent Tuesday; S&P out of correction territory

But the "1,000 points of fright" at the open Monday may not have been the classic "throw the baby out with the bathwater" selling that affords one an opportunity to jump back into stocks. I believe that the pre-conditions of strong, tradable, bottom have yet to appear.

It's true that stocks looked washed out in the near-term and could be in for a "dead cat bounce," a short-term rally that peters out in a day, or two.

But for the market to make a meaningful bottom, I think two things need to happen.

First, Chinese officials need to take appropriate and effective steps to shore up its economy and market.

And, they've just begun to do that. The People's Bank of China just lowered interest rates and cut banks' reserve requirements which should free up funds to lend. But they also need to continue transitioning from an export-led economy to one driven by domestic consumption. That is a policy prescription not yet wholeheartedly put in place.

Second, the Federal Reserve may need to step in and convince domestic investors they will stand ready to support stocks by delaying an anticipated September rate hike.

Read MoreIs a September rate hike less likely now?

After that, stocks will go up and then re-test their most recent lows of Monday morning.

A successful re-test, improvement in market technicals and a rebound in tech, biotech, transports and financials will provide much-needed leadership so that the market can mount a meaningful move higher.

Individual investors can pick up some stocks that are on sale, good blue-chip companies that are down 20 percent, or more. Disney, Apple, Gilead, among others, have been taken out and shot. They are good, solid companies with continued growth prospects and stories that remain intact.

While I am, and have been, concerned that China's best days are behind it, I remain convinced the opposite is true for the U.S.

The U.S. exports only six percent of its goods to China. And while slower global growth and a stronger dollar could cut export growth to other ports of call, lower oil prices, continued low interest rates, and a friendly Fed, will likely help stabilize the U.S. irrespective of what happens elsewhere.

Read MoreWilbur Ross: Correction is in the 6th inning

The bull market may have been interrupted with the first 10-percent correction in nearly 4 years, but the bull has room to run.

Get out your pencils, make out your lists and go shopping on Wall Street.

Don't binge, though, buy selectively and in a disciplined matter. That's how the pros make money in times like these. Follow their lead.

Commentary by Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street. He is also editor of "Insana's Market Intellgence," available at Follow him on Twitter @rinsana.

Disclosure: Ron Insana doesn't own any of the stocks mentioned in this column or have any other business relationships with the companies.