After a nice snapback from their ’08 lows, the dogs of last year’s second half are rolling over again? Should you get out while you can?
We’re talking about financials, materials and energy names. They took the stairs up but, as Guy Adami likes to say, are they about to take the elevator down?
See for yourself. We put together the numbers for you.
Second Half of ’08: Financials, Materials & Energy
Financials (XLF) Down 46%
Materials (XLB) Down 45%
Energy (XLE) Down 46%
Year to Date ’09: Financials, Materials & Energy
Financials (XLF) Down 10%
Materials (XLB) Down 1%
Energy (XLE) Down 3%
How should you play it?
It’s important to have a view on the economy, says the Chairwoman. Personally, I think the economy is going to get worse from here. As a result I’m short commercial real estate by being short the iShares Dow Jones US Real Estate as well as short Forest City .
I’d look at the shipping industry for a play. Rates are up somewhat but the equities are up as much as 100%. Keep an eye on Dryships and Excel Maritime . I expect to see some profit taking.
I like pairs trades, counsels the Negotiator. I’d get long Wal-Mart and short Target against it. Then, take the trade off if either stocks moves big.