Most published writers will leap like starving Dobermans at the chance to tell you what you should or should not be writing. I used to be pretty free with my opinion, too, until I realized that some aspiring writers were treating my ideas like gospel.
I did the same thing. I believed a respected industry professional who told me I would never get a vampire novel published, which made me stow the Darkyn novels proposal for three years before I took a chance and showed it to someone else. And sold three vampire novels in one shot.
Anything can happen in this industry. No one knows it all, and anyone who says they do is a moron. Chisel that in stone.
Writing for the market is a different matter. It's like investing in the stock market: you have to follow the trends, see where you want to commit your time and work.
When I read for market research, I target the genres I'm writing for or would like to write for. I watch authors who are very hot with publishers, who consistently hit the bestseller list and who have the largest reader following. I talk to my agent. I watch for patterns in sales and bestsellers. Then I see where I fit in.
Market research is not to predict the bestsellers of 2004-2005, because those books were sold at least a year ago. Right now you should be getting a handle on what will be hot in 2006 or 2007. Watch what popular authors are selling (you can find this info from sources like Publishers Lunch or Publishers Weekly.)
Here's a random sampling from my market research TBR pile: Northern Lights by Nora Roberts; Blind Alley by Iris Johansen; Lost Boy Lost Girl by Peter Straub; The Demon's Daughter by Emma Holly; 1968 by Mark Kurlansky; Queenmaker by India Edghill and Spice by Jack Turner. I haven't read any of these except Spice which I first read for enjoyment, and all of these books belong in fiction or non-fiction genres I either write in or am interested in writing in.
As for trend predictions . . . well, couple of years ago I predicted that Jim Butcher would Do Well and no one paid much attention. Now I understand that he's making the move to TV, where I expect he'll Do Very Well. We'll watch and see.