SAN FRANCISCO --

Today had something for everyone, except those looking for a clear indication of the market's near-term direction. Welcome to 2000.

As I (among others) predicted, technology stocks held sway today in the wake of positive earnings posted

last night. Notable gainers included

IBM

(IBM) - Get Report

and

Apple

(AAPL) - Get Report

(among others), although

Advanced Micro Devices

(AMD) - Get Report

failed to capitalize on its

breaking-the-chains-of-rationality

upside surprise. But while the

Nasdaq Composite

gained 38 to a second-straight all-time high, blue-chips slumped again, with the

Dow Jones Industrial Average

falling 138.

Whether it was a good day or a bad day depends, of course, on your perspective (and holdings). Either way, many players are not feeling terribly "comfortable" about the state of the market. Despite records by the Comp and

Russell 2000

(more on that in a minute), market breadth soured like so much milk in the

Mojave.

"It's a very narrow market

with worrisome breadth," said Paul Rabbitt, president of

RabbittAnalytics.com

in Hermosa Beach, Calif. "Technically, we're pretty extended given the run the market has had."

Earlier this week, Rabbitt lowered his recommended equity exposure to 60% from 70%, simultaneously raising the bond weighting to 25% from 15%.

Forget for a moment how poorly that 15% bond allocation likely performed in the 18 months since Rabbitt last changed his recommended weightings. Focus (please) on the fact Rabbitt is not a bear (I swear), nor is he suggesting the stock-market gods are about to seek revenge on all who dared buy when historical road signs were flashing "overvalued."

Noting the Nasdaq has suffered "pretty punishing and painful" springtime corrections in recent years, "it's not that improbable" to foresee another one coming, the strategist said. (Especially after the huge run-up to end 1999.)

"There's a bubbly look to the market," he said. "It's wise to be focusing on a little more of capital preservation rather than trying to stay ahead of the herd right now."

Rabbitt foresees the Comp falling as low as 2900 by spring, or a near 31% decline from today's record close of 4189.51. He sees more modest drops of 5% to 7% for the blue-chip averages.

Still, the analyst remains overweighted in technology, recommending 32% exposure of the equity allocation, with favorites including

ADC Telecommunications

(ADCT) - Get Report

,

Lattice Semiconductor

(LTCC)

,

Adobe Systems

(ADBE) - Get Report

,

Go2Net

(GNET)

and

Seagate Technology

(SEG)

.

But he also sees better times ahead for 1999's stepchildren, including utilities and basic materials, a.k.a. "value stocks."

Rather than the near-unthinkable trick of outperforming growth, value stocks will "participate much more evenly" this year than in 1999, Rabbitt said. "That's as brave as I'm willing to be."

Some favorites include

Consolidated Papers

(CDP)

,

Weyerhauser

(WY) - Get Report

and

Alcoa

(AA) - Get Report

.

Alcoa declined nearly 6% today after announcing a decision to restart some idle smelting capacity. And while it may be fun to say "idle smelting capacity," the announcement wasn't music to the ears of commodity-focused investors.

Not specific to the Alcoa situation, Rabbitt said "one day does not make a market" and noted his overall outlook is "not a trading call." (Good thing judging by today's action.)

For those of you wondering, I was unable to reach Dwight Anderson of

Tudor Investments

, whose forecast for a

value-stock revival was predicated on (among other things) the absence of additional capacity coming on line in many basic-materials industries.

Why You Callin' Me Shorty?

One reason Rabbitt is optimistic about commodities and other economically sensitive stocks is they have historically traded in sync with small-caps and are thus due to advance, if only to revert to the mean.

As mentioned above, the Russell 2000 set a new high today -- its fourth straight.

Yet there's an ongoing debate on Wall Street about whether the Russell's rise signals a broadening of the market, as has historically been the case. Like seemingly every other index, the Russell 2000 was goosed by its tech components last year.

Indeed, if not for the courage (and performance) of the fearless tech sector (which rose 101%), the Russell 2000's gain last year would have only been 9% vs. its 19.6% actual, according to Brad Lawson, senior research analyst at

Frank Russell

.

Also, as tech mushroomed into the index's biggest weighting -- at 23.6% last year -- the

Russell 2000 Growth Index

rose over 43% vs. a 1.5% decline for its value counterpart, he noted. (That's outperformance with a capital "out," my friends.)

The commonly held view is the same factors are at work this year. But that isn't necessarily so.

With a gain of 21% heading into today, health care is the best performing sector in the Russell 2000 so far this year, Lawson reported. Something called "other energy" (mainly oil services and drillers) is up 8.9% in the second spot, followed by technology, with an 8.3% gain.

"Good performance in 1999 was largely tech, but it's been legitimately broad for the last couple of weeks," he said.

Go figure. So I guess there's nothing to worry about, after all ... save the fact small-cap outperformance has historically augured near-term market tops.

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

taskmaster@thestreet.com.