One of the hardest things to do as an investor is knowing when to "bottom-fish" for bargains following a correction.  And the ongoing sell-off in world markets since Black Tuesday (February 27) is not over. It's still too early to hunt for bargains.

From its all-time high, the MSCI World Index of major economy stock markets has declined 6.7%,  bringing it down almost 7% from its recent high. That's a marked decline, but still only about 50% of the typical correction pattern I'm expecting. In Europe, stocks plunged another 2% today, bringing bourses in the region down 7.5% over the last  six days.  Asia, where China triggered this sell-off, stocks declined another 2-4% today, with Hong Kong stocks tanking 4%. Worldwide, the correction is intensifying as investors and traders alike continue to reposition their portfolios.

The main indicator to watch during this correction is the Japanese yen. Watch the yen closely for clues on a market bottom.

Over the last 4.5 years, global traders have borrowed heavily in depressed yen to buy riskier assets, like emerging markets and other stocks. But with the yen violently reversing since last week, positions are being closed, including speculative longs in emerging markets, major market stocks and commodities. It's a mini-crash. And in a mini-crash, you don't chase stocks; you wait for the market to stabilize, target your favorite purchases and sit tight.

The yen will continue to rally in 2007. It's extraordinarily cheap. But at some point, this wicked reversal in the yen's value will bottom, setting the stage for market calm.

Meanwhile, this correction will remain a correction. Global monetary conditions remain bullish for stocks with most central banks still providing massive liquidity, including the Fed, the ECB and the Bank of Japan. This is not a monetary squeeze, which typically precedes a market crash or bear market. Interest rates are low, heading even lower and companies have the best balance-sheets in over 30 years.

There's nothing unhealthy about profit-taking. It's just a painful waiting-game.