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US stocks still the 'highest quality': Trader

Global markets are off to a rough start this week.

Stock all around the world have seen a selloff of late, led in part by a drastic drop in China's Shanghai composite index, down 15 percent in two days. Japan's Nikkei index has fallen more than 8 percent this week. Markets in India, Korea, Australia, Brazil and others are also down for the week, although some bounced briefly Tuesday morning.

Major U.S. stock indexes on Tuesday broke a five-day losing streak, rallying more than 2 percent after the opening bell. But weakness has been spreading to the U.S. as well. The Dow Jones industrial average and S&P 500 are still negative for the year, down 9 percent and 6 percent, respectively.

But with domestic and international markets dropping drastically in the past few days, one trader says U.S. stocks are still an investor's best bet.

"Ultimately, the U.S. fundamentals are still looking very strong," Erin Gibbs, equity chief investment officer at S&P Capital IQ said Monday. "When you're in this risk flight environment, you really want to go to high quality, and right now the U.S. economy looks to be the highest quality."

As an indicator of domestic economic strength, Gibbs pointed to strong numbers from U.S. auto sales as well as existing home sales, which rose to an eight-year high in July.

The iShares MSCI emerging markets ETF (EEM) is down more than 16 percent year to date, sparked by slowing growth in China and declining commodities demand.

Read More Markets latest: Stocks surge as China cuts rates

Gibbs said although U.S. stocks could see further pullback in the coming months, she expects the blows to emerging markets to be much worse.

"We have really seen a change in risk appetite, and the current downturn that we're seeing right now is really about a contagion from investors changing from this fear-to-greed risk pendulum," she said on CNBC's "Trading Nation."

However, technical analyst Chris Verrone of Strategas sees better opportunities abroad, specifically in Europe and Japan.

"I'm not convinced that what we've seen in the U.S. is quite washed out yet," he said Monday.

Read More Why emerging market currencies are collapsing

Verrone said the number of stocks in the Nikkei that are still in an uptrend outnumber those in the S&P 500. Additionally, he believes that action on monetary policy from the European Central Bank and the Bank of Japan will help spur stock growth.

"I think both those markets may look more interesting here in terms of playing for a bounce," Verrone said.

Want to be a part of the Trading Nation? If you'd like to call into our live Wednesday show, email your name, number and a question to TradingNation@cnbc.com.

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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.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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