I have been unable to implement a sound investment strategy in the past year. In short, I'm paralyzed from taking any action, due to the inability to separate a bullish case from a bearish one.

Let me assess the negatives first:
In the U.S. I am avoiding:
1) Financials, brokerages, banking
2) Housing REITs, builders, construction
3) Autos

There is most certainly a housing and auto recession in the United States. So far, though, the leading indicators do not suggest that these areas are impacting the rest of the economy (consumer spending, for example). One of the economic leading indicators I like is the Semi-conductor market. The SOX had modestly strong growth in May, 2008. 

The positives:
1) Oil and energy are breaking new highs every day. Is there a bubble? Is the market anticipating inflation? I believe that once the US dollar strengthens, oil prices will fall. 
2) Consumer demand still strong

What Next?
Cash is still king, but it is a depreciating asset. This is a truer statement if inflation rates increase in the next while. So for now, I remain frozen. Sometimes, taking a wait and see approach can pay dividends. Other times, dividend-paying stocks make better core holdings.