5 Consumer Stocks to Short

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Everyone is breathing a sigh of relief that the rate of decline in consumer spending is slowing. That's like a cop saying, "The murder rate is going up more slowly, and, yes, there are more dead bodies in the neighborhood than at any other time, but you can leave your door unlocked."

Wall Street sees a slowing rate of decline in consumer spending as the precursor to a bottom. And a bottom is a precursor to a recovery; a recovery is a precursor to higher corporate profits; and higher corporate profits mean higher stock prices. But consumer spending will not rebound due to the recession and the breaking of the national piggy bank -- otherwise known as home equity lines of credit.

So, it's time you look at some consumer stocks to short.

Next: Playing the Lack of Consumer Spending