U.S. stocks still your best value

• No new trades.

The past couple of months have been intriguing in many ways. We've witnessed several laws of nature (and the stock market) debunked or ignored. The casual observer could say the market has been stuck in a state of inertia. But that would be incorrect because stocks attempted to rally Monday and Tuesday, and had a good day Wednesday.

in·er·tia n.

• The tendency of a body to resist acceleration; the tendency of a body at rest to remain at rest or of a body in straight line motion to stay in motion in a straight line unless acted on by an outside force.

• Resistance or disinclination to motion, action or change: the inertia of an entrenched bureaucracy.

Source: Dictionary.com

Stocks haven't been static, and in fact they've bucked the gravitational pull of bad news on consumer confidence, the housing market and subprime home loans.

grav·i·ty n.

• The natural force of attraction exerted by a celestial body, such as Earth, upon objects at or near its surface, tending to draw them toward the center of the body.

• The natural force of attraction between any two massive bodies, which is directly proportional to the product of their masses and inversely proportional to the square of the distance between them.

Source: Dictionary.com

With that in mind, it would seem like the market should have been in free-fall mode. Large rallies have vanished intraday, and yet stocks haven't completely cracked. Moreover, market breadth has been problematic and is getting worse.

free fall n.

• The fall of a body within the atmosphere without a drag-producing device such as a parachute.

• The ideal falling motion of a body that is subject only to the earth's gravitational field.

Source: Dictionary.com

The market has existed in all of these states, often interchangeable in minutes, and that is driving investors mad. Toss in the overwhelming sense that a correction is due, and I find it interesting there hasn't been a free fall.

Because so many people are waiting for a major correction, it would seem more likely to become self-fulfilling. Sure, that moment in time will come -- for what reason, I can't say, because stocks are still cheap. I continue to believe the U.S. market is the best value on the planet, and it should bear out over time.

Sectors to keep in mind

I was too early on the home builders, but I think they'll be big winners over the next 52 weeks. I like energy on dips. I like the semiconductors, as the Philadelphia Semiconductor Sector Index ($SOX.X) is on the verge of a significant breakout. I expect financials to weather the subprime storm; Bear Stearns (BSC, news, msgs) is undervalued by a mile, and Goldman Sachs Group (GS, news, msgs) is always a buy on weakness. Biotechnology stocks are compelling, too.

I hope everyone commits to being investors in the market and stops playing the game of chasing and selling simply because that's what the crowd is doing.

It has been a pleasure and honor to participate in Strategy Lab. If you get a chance, pick up a copy of my new book, "Be Smart, Act Fast, Get Rich."