Bulls Bid for Another Romp

On the Dow, Pavlik expects GM, H-P, Merck and AT&T to continue leading the way.

"Sticking with the defensive themes of the year, health care and pharmaceuticals look to be winners," Nolte says. "Telecoms are also rebounding, as they're starting to finally make some gains in sales. They've stopped the bleeding."

Hyman also likes health care, in addition to financials and the technology sector. "At this point, given our forecast for the next few months, we continue to favor large-cap over small-cap as a style choice. Sectors we would put less emphasis on are consumer cyclicals and energy."

Then there's the matter of whether the Dow is poised to set an all-time high in the coming months, and if so, just what that would mean.

"From a physiological point, it does matter," Pavlik says. "It gives investors confidence to buy, and an increase in demand for stocks causes stock prices to rise."

Still, he doesn't expect it to happen by the end of this year. "Even though we are only 400 or so points away, right now the Dow has too many things working against it," he says. The economy is slowing, he says, and companies like General Electric(GE Quote), Caterpillar(CAT Quote) and 3M(MMM Quote) will likely see their earnings weaken.

Hyman agrees that a new Dow record would be an important indicator.

"The major averages, like the Dow, represent the corporate behemoths of the world, and any strength in that sector would indicate that the global economies are performing well and are expected to continue to do such," he says. "It is more of a confirmation of our economy and the implications for our future growth opportunities."