<broadening top formation>
Using inflation-adjusted numbers, the 2007 top was below the 2000 top. That makes it a (modestly) declining channel, with lower highs and lower lows expected.
With that said, I wouldn't be surprised to see SPX hit all-time highs, this year or next. I am spacing out my sells (of long positions), and shorting, to be net short the market when we hit all-time highs.
I'll be adding shorts in airlines. This is an inherently money-losing industry, which will get slaughtered if interest rates rise, oil keeps going up, and a recession threatens.
Here's how they did last recession (2006-7 high to 2008-9 low):
UAL 51 to 3
DAL 23 to 4
AMR 41 to 2
LCC 63 to 2
Recreational Vehicle makers, and cruise ship lines, are other potential shorts. They are consumer discretionary, usually bought on credit, and fuel-sensitive. |
