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The major market averages have, to a great extent, managed to keep a stiff upper lip in the face of record-high crude oil prices and the continuing peril in the financial sector.

I think this market's resilience is truly remarkable, especially when you consider that so many of the stocks in the financial sector have been trounced by the latest bout of subprime flu.

Industry stalwarts like Citigroup (C) and Merrill Lynch (MER) have had some really high-profile implosions of late, but I believe these companies could be just the tip of the proverbial iceberg when it comes to an even wider collapse in the financial sector.

I said this last week, but I will say it again. If you are even thinking about investing in financial stocks at this juncture, just don't do it! Even the most successful bottom fishers out there aren't wading into the financial pond yet, so there is no reason for you, the individual investor, to do so either.

Because financial stocks make up a sizeable portion of the S&P 500 Index, the drubbing in the sector has caused the S&P 500 to meander about of late. In fact, if you look at the chart below of the S&P 500 over the past six months, you'll quickly realize that the market hasn't really made much headway.

From a technical analysis perspective, the S&P 500 is now sitting rather precariously above the 1,490 mark. I think this is where the key level of support is right now. If we were to break below that 1,490 mark, things might start to get tough for the bulls.

Adding to the potentially tough slogging for the bulls are those aforementioned record-high oil prices. I figured we would get to $100 oil at some point in the next few years, but I didn't think we would be knocking on its door with nearly a full quarter to go in 2007!

I guess this goes to show how the most important commodity of our time is also one of the most volatile.

Now if all of these negatives paint a bleak picture of the market going forward, I am here to tell you that such a widespread slippage is most definitely not the case. There are some tremendously positive sectors in this market. Sectors like energy, gold, technology, alternative energy, China and international stocks have all been on a tear of late.

This sector divergence between financials and other high-flying sectors should serve as a key lesson when trying to make the most of your investment dollars. That lesson is diversification and sector allocation.

Right now subscribers to my Successful Investing advisory service have a 100% allocation to equities, but that equity exposure is carefully spread out amongst technology stocks, energy stocks, health care stocks and stocks aligned with the China bull market.

More importantly, we are avoiding any direct exposure to the financial sector and other sectors currently suffering through the symptoms of the subprime flu.

Fabian Wealth Strategies is a registered investment advisory firm specializing in Exchange Traded Funds. Our philosophy is grounded in transparency, risk management and low cost. We are now accepting new clients for both income and growth portfolios. We want to help you safely grow your investment portfolio and secure your financial future.

Fabian Wealth Strategies offers asset management, financial consulting and investor education on a fee-only basis. To learn more about how Fabian Wealth Strategies an help you, call 800-391-1118 or e-mail info@fabianwealth.com.