"I remain bearish," said Joseph Terranova, chief market strategist for Virtus Investment Partners. The said the May labor report Friday will be one of the most important events. It's critical to see how investors react to the unemployment results and to a possible Greek debt solution, he said.
Regardless of these two events, Terranova believes a sizable correction is likely for U.S. stocks in the near term.
"The market is expensive," added Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Merrill Lynch. With that being said, valuation is not typically a good indicator for stock direction in the short term, she acknowledged.
But if investors don't buy stocks, what else is there? Subramanian says bonds aren't attractive given the low yields and commodities remain questionable. Instead, she likes large-cap U.S. stocks, which have decent valuations and are of high quality.
Stephen Weiss, founder and managing partner of Short Hills Capital Partners LLC, added that stocks in developed European countries are also attractive. He expects a rising U.S. dollar to hurt emerging-market stocks with the exception of Indian stocks, which seem likely to go higher.
Large-cap technology stocks also look attractive and the sector "has more upside," said Pete Najarian, co-founder of optionmonster.com and trademonster.com.
Merger activity in the tech sector seems likely to increase, Weiss added. He expects deals in the health care and industrial sectors to increase as well. Companies are feeling pressed to make deals in order to boost growth and to secure financing before the Federal Reserve raises interest rates, he explained.