With limited formal economics studies, I tend to plan my strategy based on my market observations after I looked at the charts and of course with some added common sense. So in the last few days, my strategy has been to focus on the inverse ETF to position my self for further downside and by using an ETF, I limit my exposure to extreme movements in the individual stocks.
My strategy is based on the following themes/observations
- There could be extreme pressure for institutional funds to liquidate assets so equity positions can be sold in bundles anytime which could pressure the strong stocks
- Quick money has been made shorting financials but a long bottoming process could be in place and a final push down could happen to flush out all other weak hands before the value investors starts looking at what's left of the sector.
- More downside for the REIT holders
- China stocks could see more downside as China is being looked at as a coupled-economy to US
- Mid and small caps are vulnerable to liquidation
- Metals/Gas/Oil are still hot as booming economic expansion in other areas keeps demand high
- Agricultural and Chemical manufacturing (fert) are still strong
Update 9:00am : I will be selling into the spike up for the inverse ETFs