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Whether a near-term bear or bull, the recent selloff in the market is presenting opportunities in one sector that has a small correlation to the rise in the 10-year rates or to concerns about the slowdown in the Chinese market -- Aerospace and Defense.

Let's look at why:

1. As last week's Paris Air Show highlighted, all is well in the commercial aerospace sector. Boeing (BA), who along with Airbus are the two largest manufacturer of planes, saw good order flow at the show, generating nearly $140 billion worth of new orders according to the Wall Street Journal. Both firms have added +/- 700 orders year to date. Boeing has a backlog that extends through 2019 and has been increasing production rates to meet demand. Suppliers such as Precision Castparts (PCP), Honeywell (HON), and Hexcel (HXL) are also to benefit. Since new planes save airline operators money, any cancellations or delayed deliveries due to market conditions will easily be filled by orders to healthier competitors.

2. The preliminary Department of Defense budget for FY2014 is already in negotiations. The Pentagon has been good so far in mitigating the impact of sequestration on suppliers such as Lockheed Martin (LMT), Raytheon (RTN), etc.

3. Global challenges and strife in the Middle East and Asia remain high and is increasing the need by foreign governments to acquire U.S. defense technology

4. Analyst estimates concerning revenues, backlogs, and balance sheets have not come down for the 3Q earnings season

5. The impact on rising interest rates on defense companies should be minimal as many have solid balance sheets and have already taken advantage of recent bottom in interest rates to raise capital.

6. After more than a year, trading volume has risen and new inflows have been detected into the Powershares Aerospace & Defense ETF (PPA) at levels consistent with institutional trading.

Source: Market Selloff Presents Opportunities

Additional disclosure: The author manages the SPADE Defense Index (NYSE: DXS). Under license, the Powershares Aerospace & Defense ETF (NYSE: PPA) tracks the performance of the index.