"The sectors that have been beaten down the most over the last two months are energy and metals. Since May the worst have been Manufactured housing -33% Long distance carriers -29.82% building materials wholesale -26.78% oil and gas -25% aluminum -21.5% semi-conductors -21.32%" Im staying away from housing, I will put those with the airline stocks. Long distance carriers I tend to stay away from. We are moving into a new world where voice over ip might take over the telephone system. The cable companies are offering phone service.... Oil and gas I will stay away from until oil gets down a little further. Semis are my favorite. Yes, there is overcapacity right now or a "glut", but we all know that that situation will not last for long.
Here is a simple way to find which stocks to short and long. We all know the two cycles of the market by now. The May-October period and then the November-April period. In April, see which sectors are nearing the highs and in August which ones have hit the lows. Buy in August, sell in April, short May, June, July.
That is a great suggestion and it does work, but I would further suggest doing that exact same thing with market sectors first, and then find the stocks you wish to invest.