Fear of a global slowdown has taken the wind out of oil and materials stocks, which we are now shorting. Cemex (NYSE:CX) shares were down over a third in just one week.

Many investors have likely been pounded into a stupor following the hammering inflicted on stock markets across the globe by the European debt crisis. This was followed by the Fed's sucker punch. The U.S. economy is not about to rebound soon.

While I agree with this IMF view about sustained emerging market growth, the stock markets may have over-reacted near term to stories about reduced orders from China. So I have recommended investors take cash out of oil and materials stocks to reduce losses. Plus, the valuation for most oil stocks will probably follow crude oil prices lower. In response the model portfolio now includes a short position in oil to ride out this technical downdraft.

Read more in the attached weekly update and ...

Happy trading this week!

Rudy

Some of the WORST stocks during this week included:

• Cemex SAB de C.V. (NYSE:CX) -34.5%
• Gafisa S.A.(NYSE:GFA) -25.6%
• Desarrolladora Homex S.A. de C.V. (NYSE:HXM) -20.7%
• GOL Linhas Aereas Inteligentes S.A (NYSE:GOL) -20.7%
• Rio Tinto plc (NYSE:RIO) -20.4%
• Data date: 9/22/11