While I still believe that we could see higher levels in the Dow as well as Nasdaq in the weeks ahead, stock picking and careful sector selection will make a lot of sense. Still, the Fed's strategic posture remains the key to the entire equation. The April jobs report is thus critical, given the major decline in March. This report will determine the degree of aggressiveness with which the Fed will cut interest rates and hence shape both sentiment and valuation on Wall Street. There is also increasing pressure on the ECB to cut interest rates.
Strategy still favours financials, energy, health care.
In technology, my bias remains for consistent, stable earnings and moderate valuation. This is the reason why IBM is still a good bet at 23X current earnings. I would, however, take profits on IBM at 125 or so. There are still interesting short opportunities in European incumbent telecom providers. It has gross debt levels of 65 billion Euros.