The bears came out of hibernation this week.
The Dow Jones Industrial Average suffered its biggest weekly drop since August on worries about higher oil prices, inflation and losses in the subprime lending market. That prompted some chatter that this could be the beginning of the long-awaited correction.
Still, market pros who spoke to CNBC.com said that while the market may be due for a pullback, it's too early to pronounce the bull dead.
"I think of the poor souls who have been on the sidelines waiting for a correction," Al Goldman, chief market strategist at A.G. Edwards, told CNBC.com. "The market is acting very tired, but my sense is this is going to be a temporary pullback because fundamentals are still good."
"Any one day or any one week really doesn't matter," Michael Cuggino, Portfolio Manager at Permanent Portfolio Funds, told CNBC.com. "I think investors are asking, 'Where are we going?' You combine that with higher oil and slower earnings growth and this is what you're seeing in the market."
Where to Put Your Money
Understandably, investors want to take advantage of the market if it continues to climb, but no one wants to get caught in a serious downdraft. Analysts say there are still good ways to play the market, even if a correction is looming.
"I think the prudent investor should be pretty diversified right now because of all the different risk factors," said Cuggino. "Have a healthy dose of equities but also some investments beyond stocks such as precious metals and the shorter end of bonds for income."
"Keep your money on the sidelines for a few days and use these pullbacks as a buying opportunity," said Goldman. "We like medical products, biotech, financials and selective high-quality technology stocks, which are coming out of the doghouse."
"This is not the big one but this is a shoplifter's market in that everyone is looking over their shoulder," Adam Lass, senior market analyst at Wavestrength.com, told CNBC.com. "When you have nothing strong going one way or the other, we recommend getting a piece of the action and the threat.
"We are buying mid-dated Diamond puts (the exchange traded fund which tracks the Dow Jones Industrial Average), but going long on the ETF," he added." We recommend at least one good oil company. We suggest buying Chevron." Lass does not own any of his recommendations.
Next Week's Drivers
A big factor in where the market goes from here is the slew of economic data next week-- including new and existing home sales, durable goods and the latest revision of fourth-quarter economic growth. Analysts are expecting a downward revision of the GDP to 2.3% from the hefty 3.5% reported last month. Analysts say they will be looking for telltale signs in the data about the strength of the economy.
"We've got existing home sales and new home sales, which are trigger points for indicating if we'll be pulled into a recession or avoid it," Rob Morgan, Investment Strategist at Janney Montgomery Scott, told CNBC.com.
"My hunch is that home sales will be on the weak side," said Joseph Keating Chief Investment Officer at First American Asset Management. "The key number to watch will be the inventory on new homes. I think it will point to the housing slump not being over yet by a long shot."
"We're looking for a strong GDP number," said Cuggino. "The biggest surprise to me was the annualized GDP number for last year. Despite rising interest rates, the economy did not slow as everyone expected. I see the economy still continuing to grow."