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NEW YORK (ETF Expert) -- Since the "no-taper" euphoria has passed, U.S. stock assets have been falling, though the declines have been modest. Most investors continue to believe that a last-minute deal will be struck and that a bearish retreat like the 2011 correction is improbable.

Nevertheless, different economic sectors appear to be responding differently to the current landscape. While previous blueprints for budget uncertainty may have favored non-cyclical segments such as health care and consumer staples, old-school rules may not be applicable.

Granted, assets like SPDR Select Sector Materials and SPDR Select Sector Financials may be following the risk-off rules of investment anxiety. Nevertheless, it is rare to find safer havens like Health Care and Consumer Staples near the bottom of the barrel. Equally strange, it is a bit ironic to find economically sensitive Industrials at the top of the leaderboard, let alone a volatile segment like Technology.

Since the budget impasse has been tied to Obamacare, I suspect some of the selling in XLV may be associated with uncertainties here. And perhaps the move away from Consumer Staples is related to an expensive sector with poor earnings prospects. Yet I am still surprised how Energy, Industrials and Tech can lead the pack in the face of rancorous non-negotiations as well as subdued profit expectations.

Warren Buffett recently claimed that he is having a difficult time finding


to buy. What's more, he is sitting on $49 billion in cash. Should we call this "

de facto

market timing?" If Buffett cannot find anything to purchase -- if the Oracle of Omaha maintains that he does not see bargains after a four-and-a-half year run-up -- why are economically sensitive conglomerates in the Industrials space holding up so well? It would be tough to argue that Industrials are inexpensive with a trailing P/E of 18.9, an optimistic Forward P/E of 16.4 and a price-to-book (P/B) of 3.3.

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Investors should also be mindful of the fact that, even if the flatness of corporate revenue is of little concern these days, and even though short-term solutions for the budget as well as the debt ceiling are likely to emerge, the

Federal Reserve's

"no-taper" decision probably injected even more uncertainty into the investing picture. Whereas some believe the decision to wait was a pleasant surprise, it only raised doubts surrounding Federal Reserve communication.

Now, nobody really knows what to expect from the Fed; now, central bank decisions are not merely data-dependent, they're also dependent on political outcomes.

For example, does the market now believe the Fed will keep on "keeping on." Long-dated bonds are having a splendid week, with

Vanguard Extended Duration

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logging 3.1% and

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pocketing 1.7%. This could have as much to do with the budget impasse as anything else, but the truth is, the Fed's efforts at enhanced communication has only led to greater ambiguity.

I remain committed to equities, with allocations to highly liquid ETFs such as

Vanguard Dividend Growth

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Vanguard International ex U.S.

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iShares Small Cap Value

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. I am also "overweight" tech at this time with funds like

Vanguard Information Technology

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First Trust Nasdaq Tech Dividend

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That said, like Mr. Buffett, I have been patient for months with some cash on the sidelines. I would be willing to buy into meaningful market weakness. However, if long-term trends break and

stop limit loss orders hit

, clients may have even more cash to protect against catastrophic bear market losses.

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This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Disclosure Statement: ETF Expert is a website that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

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