Today (and few days ago as well) I’ve started building a bearish position against XLI, which is industrials spider.  For the record today close is $38.23. At this point it is only 7% lower from the all-time highs of October and 123% above the lows of 2002. My position is still very small and I will compound over next few months.

I want to solicit the discussion on what cyclical sectors will be the most damaged over the course of this recession.

The transportation index IYT is totally out of the woods and broke the bear trend. I think I should let the bulls celebrate a bit longer before jumping on.

The airlines index $XAL got such a beating that I’m afraid to buy puts. Will they go even lower?

Consumer discretionary XLY is exactly at resistance today (I’m already short for a while). I hope it runs up and gives us a good entry point.

What else would you add to the cyclical brick-and-mortar list to short?