For agressive traders
Let’s start from the observation that stocks most widely held by hedge funds are underperforming in easing FED cycles and gloomy economic periods! Indeed, these funds have to reduce exposure and decrease their leverage on their stock baskets => in general, these stocks are decreasing faster that the rest of the market… plain & simple.
However, in a recovery move, the situation is inversed! obvious… Then, I expect a higher speed uptrend for these kind of stocks (held in hedge fund baskets). There are many choices, but I have made a defensive spread selection (covering major economic activities) also based on technical indicators and short interests:
CSX industrial
ABI health care
TIE material
RDC energy
AIZ financial
OMX consumer discretionary
This basket can be bought (with a certain risk appetite) when the rebound will recover (remember our key level of 1350 pts on the SPX)…