Stocks near meltdown? 3 picks for a bear market
One indicator is pointing to a crash. Here are some funds that could help investors protect themselves.
By Teeka Tiwari, editor www.ETFWarrior.comWhat do this market and a fictional diner have in common?
Have you ever watched Monty Python's movie "The Meaning of Life"? For those who skipped on this nonsensical British humor film, one scene depicts an absurdly overweight man, Mr. Creosote, sitting in a restaurant gorging himself. Just when you think he can't eat another thing, he decides to finish off with a wafer-thin mint. As soon as he finishes eating it, he promptly explodes.
Why have I regaled you with this story?
It's because one of the most accurate indicators I follow is starting to flash a warning sign that the market may be about to do its best impression of Mr. Creosote.
The Investors Intelligence Advisors Sentiment index has skyrocketed to 51%. This means that 51% of all advisers are bullish. Let me ask you this: How many times have you seen the crowd get it right when it comes to the stock market?
Exactly! And that is why I'm worried. Readings from this level generally point to trouble ahead. So what's an investor to do? Well I'm glad you asked, because here are the three ETFS's to watch.
iShares Trust Barclays 20+ Year Treasury Bond (TLT)
During times of market crisis you want to be in bonds. Yes, I know the yields are horrible. TLT is a short-term safe haven trade in 20+ year US government bonds.You can get long here at $119 with a $115 stop the target is $126.
PowerShares DB US Dollar Index Bullish (UUP)
When the spaghetti hits the fan the world flocks to the dollar. Use UUP to weather the coming storm. Can get long here at $22; use a $21 stop with a $23 target.CurrencyShares Australia Dollar Trust (FXA)
Commodities will get clobbered when the market drops. Australia is hugely levered to commodities, so consider shorting their currency via the ETF FXA.I'd wait for a move to $106 to short it, with a $107 stop and a $100 target.
"crash" is a term that doesnt quite capture what is going to happen to the american market...freefall spiral into marshal law is a much better description they keep acting like there is money out there for them to use, there is not, every dime they take from consumers drops the gdp one more dime.....sure america needs to tax everyone...fairly.....everyone.......that is not happening, we really need to dump income tax and go to a sales tax, everybody pays.....nobody gets a refund ever.....too easy and it is fair no matter what idiot liberals say.....a millionaire spends a million dollars, he gets taxed on a million a family of four spends 40000 a year, they get taxed on 40000 what is wtong with that?????
This is the most uninformed article on investing I think I have ever seen. Going to 20 year Treasuries when the yield is at an all-time low is the exact opposite. Yes, the money coming out of stocks in a hypothetical crash has to go somewhere, but it is likely in cash, not long term bonds. It might even be Euro-based cash rather than a collapsing dollar, or some other currency. Will commodities collaps with the stock market? Not typically, but they usually do in a declining economic environment, which is the more like scenario as we continue to print money trying to inflate a dormant economy. In that case, hyper-inflation would likely off-set declines in commodity demand.
I don't know who this person is who wrote this article, but they should stay away from investing since they clearly are dangerously uninformed.
The Too Big To Fail (or Jail) Banks have deployed their Financial Weapons of Mass Destruction, aka derivatives. These highly leveraged and risky investments may destroy the financial system, bringing down the entire market. It would be a good idea to have some money outside the banking system in gold and silver in case the banks crash, as they did in the Great Depression.
Eventually, with all the money printing going on, inflationary pressures will rise dramatically, and the bond market will implode with investors demanding higher interest rates for all bonds. Being bullish on the U.S. dollar as the article suggests is a bad idea. That makes long term Treasury Bonds an extremely bad idea. Gold and silver should do well in an inflationary environment.
How can you have both deflationary and inflationary forces at the same time? We call it Stagflation, and it happened in the 1970s.
the stock market has only been kept afloat by Bernake printing money at night and loanign out to the banks at zero percent so they can buy stocks and bonds and US T-bills
this house of cards is not helping the real economy which is worse now than back in 2008 when the financial market collapsed.
Housing is still in the dumps the only new building I see in my town of Houston is new high rise homes starting at over $1,000,000 each there are like 6 projects going right now and about twenty new homes in River Oaks (where the rich people live) being built after they tear down the existing home worth 5 million.
So we have like 20 new homes going up at a cost of about 8 million each and add in the 5 million each for destroying the old home a great sucking of 260 million out the already bad economy and perhaps 200 jobs paying $30,000 a year created for like 4 months.
So we are taking $260 million out of the Houston economy and putting back $1,500,000 in wages and perhaps $30,000,000 in materials and adding about $230 million into the pockets of the builders and the real estate people involved making them even richer. Perhaps at most 40 people here are going to get about $8 million dollars richers.
Pretty much the whole system is broken and money is flowing to the top very fast now and things are going to collapse once the Chinese mafia take over and tell the US mafia not to print any more fake monies
MORE ON MSN MONEY
DATA PROVIDERS
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.
STOCK SCOUTER
StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.
125 | 272 | 424 | 589 | 697 | 589 | 666 | 435 | 260 | 144 |
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
LATEST POSTS
The auto parts giant beats Wall Street expectations, while continuing to expand its stores in the U.S. and Mexico.
FIDELITY VIEWPOINTS
- How to sell covered calls - Fidelity Investments
- Savvy year-end tax moves to consider now - Fidelity Investments
- Seven ways to prepare for tax changes
- Five reasons an annual review is crucial - Fidelity Investments
- Take a look at mid caps now - Fidelity Investments
- State of the sector: Health care - Fidelity Investments
VIDEO ON MSN MONEY
ABOUT
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.