Now Isn't the Right Time to Buy Equities

By Guy Adami, stocks editor at OptionMonster

Everyone was getting all excited about the S&P 500 being above its 200-day moving average, but it looks as if we traded up to it and failed.

As I've been saying for awhile now, it's hard for me to be bullish here. I still think the path of least resistance is to the downside, and that means it's very hard to fade these moves lower.

I would be in a buy-on-the-dip mode but just don't think the time is right now. I think you have at least a week to a week-and-a-half before you can get back into the equities market in earnest.

What that means, for now, is that you should be doing your homework and making a list of stocks you want to buy when the opportunity presents itself. On Wednesday, in the Advantage Point newsletter, we wrote about IBM(IBM Quote) and how $120 seemed like a very reasonable potential level after Thomas Weisel Partners raised its price target on Big Blue to $140.

You also could be selectively short on some names, such as JPMorgan Chase(JPM Quote) below $35.25, the price of its recent secondary stock offering. Some of the oil stocks, such as Schlumberger(SLB Quote), may be headed lower as well.

And then there's Texas Instruments(TXN Quote), which gapped higher when it raised guidance on June 9 and Wednesday was upgraded to "buy" at Bank of America. At its current valuation, Texas Instruments may be a short with a very well-defined stop.

It looks practically as if any stock might pull back now, so there may be many opportunities to play names that you think have a fundamental and a technical story. Just be careful about going long on anything in the next several days.