"The S&P could fall down to the 1710/1720 area," said Paul LaRosa, chief market technician with Maxim Group. "You have a stock specific market. It's not a rising tide that lifts all boats. It's a very rotational market we're in."
But he still expects the S&P 500 to remain in an uptrend, and his target is the low 1800s in the next several months.
LaRosa expects the Dow to recover its Sept. 18 intraday high of 15,709 and if it does, that would then confirm the moves to records by other indexes, including the S&P, Dow Transports and Russell 2000. The Dow then could move another 1000 points higher, he said.
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"We really like energy related stocks. They're looking good, like they could rise from here," he said. But he added that among energy, investors need to be selective. There is mixed performance among the integrated players, but some of the services companies and drillers look good. Energy has been lagging the broader market, up just 15.8 percent year-to-date, and it was the worst performing sector Wednesday, off 1.4 percent. It is the fourth weakest of 10 major S&P sectors in terms of its 2013 performance.
LaRosa said he also likes technology, including semiconductors and software. He said he is staying away from retailers, some drug companies, and food companies but he likes some biotech names. "Some of the staples that have performed very well – all of a sudden look like they're not going to be going up. and could be drifting down," he said.
Highlights Thursday are the 8:30 a.m. ET release of weekly jobless claims, which is likely to be scrutinized to see how the government shutdown impacted employment and also whether there are signs of new weakness after the disappointing September jobs report.
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The other data to watch is the Markit manufacturing Purchasing Managers' Index number at 8:58 a.m., not as widely watched as ISM, but a relative newcomer that should show how manufacturing activity fared in a period for which there's little fresh data. The delayed September JOLTs report on job openings and turnover will also be issued at 8:30 a.m.
Then there's dozens of earnings – including Ford, Dow Chemical and MMM, a Dow component - before the bell. Airlines like
United Continental and Southwest also report. After the close, the highlights are Amazon. com and Microsoft.
Other early reports are expected from Celgene, Colgate-Palmolive, Bunge, Credit Suisse, Royal Caribbean, Under Armour, Sirius XM Radio, Potash, Noble Energy, Ericsson, Altria, Boston Scientific, AutoNation, Unilever, Diamond Offshore, Hershey, International Paper, McKesson, Starwood Hotels, Xerox, Cabela's, Dunkin Holdings, Alaska Air, Generac, KKR, Lazard, Raytheon, Pulte Group, T. Rowe Price, and Imax.
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After the bell reports are expected from Express Scripts, Decker's, Columbia Sportwear, Netgear, Manitowac, Zynga, DeVry, Aplied Micro, Ingram Micro, and Synaptics.
—By CNBC's Patti Domm. Follow here on Twitter