Second quarter earnings season is coming up quick, and it is likely that technology will outperform other market sectors. The big brokerage firms are currently reporting their numbers, which are not particularly good. Merger and acquisition activity is still robust, but trading revenues are down. Most firms' retail brokerage operations are turning in only lackluster results, highlighting the fragile confidence of individual investors. My best guess is that the technology and energy sectors will be the only bright spots in the upcoming earnings season.

Speaking of energy, that industry's success is very much turning out to be the manufacturing industry's burden. With increasing energy and raw material costs, the manufacturing sector stands to lose big-time over the near term. With the situation made worse by weakness in the domestic auto industry, the manufacturing sector is set to disappoint investors later this year.

We will probably get a solid second quarter earnings season, but watch out for the third and fourth quarters. It just is not looking like 2005 is going to be a positive year for the broader stock market. I hope I am wrong.

So, if you are buying and selling stocks right now, a little more caution seems appropriate. As you know from this column, I like the eye care industry and the pet care industry, both of which are fairly recession-proof. Healthcare in general looks like it will outperform going forward, and so will the right technology opportunities. I am not too keen on the large-cap stocks, and I would definitely stay away from the industrial or manufacturing sectors over the near term. A good entry point in these industries might occur sometime next year.

I just cannot wait to get a look at second quarter financial results. Not only will the raw numbers be telling across the broader market, but also corporate visibility (otherwise known as company forecasts) should be most enlightening.