Stocks (^DJI, ^IXIC, ^GSPC) are eyeing a recovery after a three-day sell-off. But is it too early to declare today's movement as a "Turnaround Tuesday"? Longview Economics founder, CEO, and chief market strategist Chris Watling joins Catalysts to discuss the market action and how investors can best position their portfolios amid volatility.

"Sell-offs tend to happen in waves. So it's not just a straight line down, then we're done. You know, they tend to be three waves or five waves. And in the middle of that, you get these relief rallies," Watling explains. "So it's perfectly natural that you have a very aggressive downside, a little bit of short covering, which creates a rally, which is probably what we're in now."

He adds that back in July, there was an aggressive market rotation as the Russell 2000 small-cap index (^RUT) saw growth while the tech-heavy Nasdaq Composite (^IXIC) saw a significant sell-off. As the stock market leadership started to change, he notes that we're now "in a liquidation event."

"You never changed global sector leadership without a big pullback," Watling tells Yahoo Finance, viewing the next few weeks and months as an opportunity to invest in the new sector leadership and move away from the Magnificent Seven tech names.

For investors trying to navigate the pullback, he encourages them to "buy the bounce, trade them for a couple of weeks, go long if you're nimble, but really lighten up if you're if you're sort of multi-month investor. It all depends on your time frames. That's the challenge."

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Melanie Riehl