Suggestions for stock & other positioning in anticipation of a rising inflationary market & rising interest rate environment?
Familiarize yourself with the business cycle and sector rotation.... currently the grandmaster of such studies is Sam Stovall. There is no one better. Personally i prefer to short the stocks in the sectors that are the first to take the downward slide.... and begin to long stocks in sectors that are most likely to rise while we're still at the bottom of the cycle. Problem is.... there is no set rule to which exact sector will rise and fall in a specific time period in the economic cycle. I also incorporate geo political atmosphere into the equation. I use top / approach. However this type of trading is really useless if you're just day trading.
Hmmmmmm let me be more specific. Didnt really answer your q....As of where we are now..... stocks in the service sector and financials are traditionally the ones that tend to under perform......this year being especially true for the financials. But i go outside the box.... I begin to scout for stocks in these sectors early on. But where do i look? do i go and scout for weak performing stocks in sectors that are soon going begin to fall in a recession?? nope. I go to IBD..... I love IBD... especially there highest ranked stocks! Yep i study their charts and prepare... not to buy but to sell..... the exact opposite of what you think one should do. Look for the highest RS stocks in the sectors that are set to fall in a specific time on the economic cycle. Keep watching the charts and look for when the earnings come out. (look for over extended ...parabolic set ups)........MY GOD...... those overly inflated, pumped up.. owned by everyone that follows the momentum plays............... they fall... and fall hard!!! Believe me.... i seen it sooo many times. you can make a good coin when these bloated pieces of hype miss their numbers.... im talking 10-20 points in as little as 2-3 days!!!!!!! But its important that you get the sector right and the timing right in the economic cycle.... very important, again.... Sam is the man. (hes the financial advisor for the S&P). Think outside the box a little bit.... sometimes, sometimes.......you want to forget the "under performing stock in under performing sector" baloney... when you're looking to short. Ofcourse some people can not find shorts as well as longs. For me i like it.... biggest calls i ever made on here were shorts.... all taking huge dives.