Capitulation? Not Just Yet for the Stock Market

Investment advisers will always look for opportunities in time of uncertainty and this is no exception. But the lack of a market bottom in sight combined with the drop in stocks makes the effort a bit more challenging.

"There's no clarity in this market right now. When there's no clarity that provides opportunites. When there is clarity you've got a much more expensive market," Krosby says. "But when you start introducing the geopolitical fears, investors don't want to put money to work. ... This is a trader's market, a stock-specific trader's market."

Krosby believes oil- and gold-related plays look strong for now, but investors need to be cautious about concentrating in specific areas.

"The mantra is to be diversified as much as you can and do your dollar-cost averaging," she says. "The market is going to change direction when you least expect it."

Larry Edelson, an analyst at Weiss Research, likes consumer staples and natural resources, one of his specialties. But he cautions that a steep selloff could be ahead should the indexes test lows established by a proprietary analysis he uses and then continue to fall.

"Keep your eyes on 11,989 in the Dow and 1,294 in the S&P 500 at month's end," Edelson says. "If the Dow closes below the 11,989 number and the S&P falls below 1,294 we're going to see a heck of a washout. If they manage to hold those support levels, I would say now the worst is done."

Gendreau believes industries that were strong last year will boost the market this year, including export-oriented companies, as well as industrials, technology and materials.

But he worries that the market lacks a true leader at this point.

"Somehow I don't think financials are any more likely to lead the market up now than technology stocks were in 2001. It just doesn't ring true," Gendreau says. "It's not obvious what the catalyst is going forward. You're hearing this from an optimist."

Cohn, though, advocates "nibbling" at both financials and consumer discretionary, two sectors scaring investors in these uncertain times both for the market and the economy, where consumers are getting squeezed by soaring energy prices.

"We could have the type of rally that all the things that have been working for the last six or nine months--oil, agriculture, materials--those guys are going to languish, while we pull up the dead cats--consumer discretionary and financials. They're due for a rally," Cohn says. "These groups are so far oversold and some of them, given a scenario, will stop bleeding and are somewhat of a bargain here."

Those could be as good a place to start as any in this market.

"The market needs a major catalyst to push it on the upside range, to pull out of the top of trading range," Krosby says. "It can come from anywhere. It can come from Washington, it can come from the energy markets, but it definitely needs something."