Market predictions for 2011

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As we head into 2011, I am trying to prepare the big picture for global economic conditions that will help me identify better investment opportunities in next 1 year. Here is the list

  1. Housing market languishes on (trade – short on homebuilder and their suppliers)
  2. Double dip recession becomes official (trade – short consumer discretionary  stocks, specially luxury retailers)
  3. US unemployment goes above 10% (trade – go long discount retailers and short on paycheck service providers)
  4. Interest rate continues to remain at 0%. (trade – long on gold and silver)
  5. European debt crisis ( trade – short on EURO and GBP, also on large european banks)
  6. US dollar rebounds  (trade – long USD thru etf – UUP)
  7. Trouble at state and municiple level (might push unemployement numbers to higher level)
  8. China becomes serious problem (trade – short chinese etf, emerging markets etf too)
  9. Corporate profits falls and hence the market along with it (trade – hedge long positions, trade short on equities)
  10. Emerging market central bank take action to contian asset bubble (trade – go short on BRIC countries thru etfs)

Happy Trading

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