How to Protect Your Portfolio: Seven Ideas for Investing Now
"There are a lot of industries where capacity utilization is low but the entire productive base has been reduced," he says. "As demand rebounds there's less capacity available to service that demand."
In addition to builders, the capacity utilization criteria fits the insurance, retail and air freight industries, he says.
There's less universal agreement on the strength of tech, which has helped drive the rally. Consumer electronics was the 11th strongest sector in the third quarter, growing 44 percent, and some think the move higher can continue.
BofA-Merrill Lynch cited the group's strong valuation, consolidation and cash as reasons it could move higher.
On the downside, the group has some of the market's most attractive names and could thus be somewhat oversold.
"There's been window-dressing in portfolios from money managers towards September. They're not going to print their portfolios without showing they own Apple , Google , Yahoo and the other big movers," Anderson says. "Now that we're past the third quarter money managers are going to want to reduce their exposure."
The sentiment reflects a general uncertainty about the market that will present challenges for investors through the duration of 2009.
"We are very concerned that the market, while priced for a V-shaped recovery, is set up for some significant disappointments," Halliburton says. "We think a V-shaped recovery is very unlikely and the probable scenario is for a continued modest correction."