A day after Monday's modest rally, the market is back down because of concerns about Thursday's Federal Reserve meeting, Aaron Task said on Jim Cramer's "RealMoney" radio show Tuesday. Task, co-executive editor of TheStreet.com, is filling in for Cramer this week.

Traders have had to ply this lagging market since early May, Task said, referring to the June 6 radio show, when Cramer advised listeners how to maneuver.

The market doesn't want to rally, because when it rallies, people panic and come in and sell, Cramer had said.

Panic is like a falling knife, he had said. If people try to catch it, they will get cut. Cramer had advised people to wait until the knife hit -- at least until the end of the day, to avoid being butchered.

"Don't cash in all your companies that are doing well," Cramer had said.

Cramer also had recommended staying diversified, saying that such a portfolio was the only prescription for staying in the game. And while it wouldn't entirely take away the pain, diversity would lessen it.

It certainly has been a choppy, down, volatile market since early May, Task said.

Since May, investors have wondered whether there has been a change in leadership in the stock market, he said.

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For the past five years, Task said, small-cap and mid-cap stocks have dominated with better growth and stronger valuations than larger-caps.

But in the second quarter, that started to change -- or at least there is a perception of change out there, Task said, as this is the first time large-cap stocks have outperformed in several years.

Not Fun in the Summertime

Task welcomed William Gabrielski, research analyst at

TheStreet.com

and co-author of the

Breakout Stocks

and

Stocks Under Ten

newsletters.

Task asked Gabrielski how he was dealing with the current market environment.

It hasn't been easy, Gabrielski said. In general, the key to speculating is finding companies that are profitable, because then you have a downside valuation target. Investors can then value the company on something, he said.

For example

Sirius Satellite Radio

(SIRI) - Get Report

is not profitable, Gabrielski said.

"So subscriber growth is not a good valuation model?" Task asked.

It's a good data point in an up market, but you have to adjust your strategy in a sour market, Gabrielski replied.

As to the notion that momentum might shift to bigger-cap stocks as the Fed tightens, Task asked Gabrielski if he was concerned about such a shift.

Although the shift hasn't occurred yet, people are seeing the shift starting, Gabrielski said. But when you make that argument of a shift, you are talking about relative performance, he said.

"It really comes down to stock selection," Gabrielski said, adding that he believes you can outperform the market by changing strategies and not following any strict guidelines.

When Task asked about

Palm

(PALM)

, which reports its numbers Thursday, Gabrielski said he is optimistic about the company.

It opened strong today, Gabrielski said, adding that he is confident that Palm's market share will remain steady.

Although there has been a lot of bearish talk about the company, it hasn't shown up in Palm's numbers, he said. Gabrielski believes that the company will report some excellent guidance for its August quarter and for 2007.

However, Task, referencing the June 9 show, said that summer is generally not a good time to invest in tech stocks, according to Cramer.

When people look at the market, they think of technology. But technology stocks are news-driven stocks, Cramer had said.

He had urged his listeners to sell technology before the summer as new tech products do not come out in the summer.

"The semiconductor industry is the single worst place to be right now," Cramer had said. "Every summer I have been in this business, the technology industry has been down, so why should it be any different now?"

PC sales are down, and inventory in this sector is piling up, Cramer had said. The only stock Cramer had said he liked in the sector was

Apple Computer

(AAPL) - Get Report

.

Otherwise, Cramer had advised listeners to sell technology stocks every time there is a rally in the sector.

When Task asked Gabrielski if he is concerned about getting into tech stocks now, Gabrielski responded that although he agrees with Cramer about not investing in tech stocks with a short-term horizon, he believes companies such as

Broadcom

(BRCM)

and

Advanced Micro Devices

(AMD) - Get Report

are companies with amazing stories, and worth investing in.

Gabrielski said

Zoltek

(ZOLT)

and Palm are his best pure plays.

Task's Callers

General Motors

(GE) - Get Report

has been a difficult stock to own the last couple of years, Task told a caller, who had experienced a 40% decline in the stock.

General Motors is a mega-cap, said Task, adding that there is a school of thought out there that they represent a better value on a P/E basis than do small-cap or mid-cap stocks.

"I would be wary of holding down a 40% decline," he said. "But if you haven't owned it yet, it might be a good place to take a nibble at it."

Hewlett-Packard

(HPQ) - Get Report

has been a great performer in the last year, Task told another caller. But now it's become more of a show-me stock.

Task believes that the road ahead looks tougher for this stock, and he said he would stop buying it for now.

Gabrielski said that although H-P has had a good run, he likes Apple better.

Gabrielski also told a caller who asked about

Marvell Technology

(MRVL) - Get Report

that people are fleeing the stock and that he prefers Broadcom.

When a caller asked about

Target

(TGT) - Get Report

, Task said it has been difficult lately, and although the company's products look great in the store, they fall apart at home.

He said he would rather own

Wal-Mart

(WMT) - Get Report

, which he believes has found a bottom and will work its way up.

Task said that Apple is still in its sweet spot, and Gabrielski agreed that Apple is a go-to stock.

Although Apple stock might come down a bit, Task said the iPod is the device people want to own. Though the company has been suffering a little bit lately, it is likely to benefit after the

Fed

meeting, he said.

Task told a caller that he does not like

Vodafone

(VOD) - Get Report

. He called it a lumbering tech giant that overpays for acquisitions, and said that there are better places to put your money.

Aaron L. Task is the co-executive editor of 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.

Click here

to send him an email.