After studying the details of the debt ceiling deal, here is a list of action items that all investors should consider:
- Short sell nursing home stocks. On our radar screen are Skilled Healthcare Group (SKH), Sun Healthcare Group (SUNH), and Kindred Healthcare (KND).
- Buy banks with strong treasury exposure. On our radar screen are Citi (C) and JP Morgan (JPM).
- Short sell banks with high mortgage exposure. On our radar screen are Wells Fargo (WFC) and Bank of America (BAC).
- Short sell H&R Block (HRB) as there is likely to be some tax implications.
- Short sell defense stocks. The best ETF to short is PPA. On our radar screen are Lockheed Martin Corp (LMT), Teledyne Technologies (TDY), General Dynamics (GD), Esterline Technology (ESL), and Ceradyne (CRDN).
- Short sell home healthcare stocks. On our radar screen is Amedisys (AMED).
- Short sell Medicare and Medicaid HMO stocks. On our radar screen are Humana (HUM), Centene (CNC) and WellCare Health Plans (WCG).
- Short sell housing stocks. On our radar screen are Standard Pacific (SPF) and KB Home (KBH).
- Buy consumer staples. On our radar screen are General Mills (GIS), Kellogg (K), and Procter & Gamble (PG). A good ETF to consider is XLP.
- Short sell base metals. A good inverse ETF is BOS.
- Short sell healthcare stocks in general. A good ETF is RXD.
- Short sell precious metals. Good ETFs to consider are SLV and GLD..
- Short sell the Swiss franc against the dollar. A good ETF is FXF.
- Short sell the Japanese yen against the dollar. A good ETF is FXY.
The key to success is the timing of buying and short selling these stocks. We will be using, as always, the proven ZYX Change Method. We will be providing actionable signals with entry zones, stop zones and target zones in ZYX Buy Change Alerts, ZYX Short Sell Change Alerts, and ZYX Global Multi-Asset Allocation Alerts as appropriate.
Disclosure: I am short SI.