We were set to go down the biggest drop in the rapids that day — a 14-foot plunge known as Sweets Falls.

I was nervous, but I had a feeling it would work out. Our guide had already proven himself on that trip.

Class five rapids in the Gauley River of West Virginia are what you’d imagine rapids on a movie set would look like.

Going down it in real life was one of the more extreme adventures I have been on.

As we headed through the thrashing waves of the river, our guide made sure to keep us alert.

Undercut rocks, whirlpools and drop-offs were all around us. We worked tirelessly to dodge them as we kept getting hit by the waves.

Then we hit a wedge, literally.

Coming off of Sweets Falls, we were just excited to stay in the boat during the plunge.

Next thing I know, we are pinned between two rocks. Me, my two brothers and a few others had no idea what was about to happen.

At that point, our guide who helped navigate us safely so far, stepped on our shoulders and jumped onto the rock beside us.

Our boat flipped over immediately.

I was pinned under the raft, while my little brother was drifting toward another intense rapid.

It’s safe to say our guide let us down.

After navigating us through some of the biggest rapids, he left us to get swept down the river, fighting for a rock to cling too.

That one moment turned what was a great experience, into a terrifying one for many on the boat.

He failed to keep us away from the dangers on the river.

That’s a guide’s job, after all, to help you navigate a truly turbulent environment.

And that’s my No. 1 job, too. I’m here to help you navigate the ups and downs of a volatile stock market.

But I won’t let you down. That’s why today, I want to warn you about two danger zones to avoid over the next few weeks.

2 Sectors to Avoid

Just like how we felt after living through Sweets Falls, the stock market is in major turbulence.

We just survived a global pandemic and an economic shutdown, to see stocks back at new highs in many industries.

But there are still dangers just around the corner that could flip this boat anytime.

And two dangers to avoid right now are the financials and materials sectors.

We’ve been through a lot in 2020, but this year still has over four months left.

With an election and a pandemic going on, there’s no telling what else happens this year.

But I know one thing — you want to avoid the financials and materials sectors for a couple of months.

These sectors are historically weak this time of year.

From August through the end of September, these sectors are prone to larger than usual sell-offs. That’s why they are on my list of sectors to capitalize on when the pullbacks occur.

And those pullbacks are on the way.

These sectors tend to hold up better in early summer, then start to see some weakness until October.

It’s the period between earnings for these two sectors. And the market tends to focus on tourism-based stocks, such as hotels, airlines and cruise lines in the summer (though maybe not this year). That adds up to these stocks getting ignored historically. This lasts till around October.

I’ve been tracking both of these sectors closely using their sector exchange-traded funds. The Financials Select Sector SPDR (NYSE: XLF) and Materials Select Sector SPDR (NYSE: XLB).

And I think we will see pullbacks any day now. Here’s how we’ll take advantage of it.

Take Advantage of the Pullbacks

Most people think you have to use options or short individual shares of stock, to benefit from a declining stock market. But that’s not true.

Heading into this weak period for the financials and materials sector, I have my finger on the buy button for an inverse trade.

Inverse funds are as easy to buy as a share of stock. But they are designed to profit as certain sectors of the market pullback.

With inverse funds, profiting from pullbacks is easy — no options, no margin and no shorting stocks.

I’m patiently waiting for the right time to recommend these inverse trades in my research service, Automatic Profits Alert.

We use short-term trends, where we see pullbacks or rallies that last just a month or two, to stack our profits all year long.

It’s the ultimate strategy to help you navigate a volatile stock market. And I’ll be your guide the entire time.

Click here to find out more about this simple approach to begin stacking your profits.


Chad Shoop

Chad Shoop, CMT

Editor, Automatic Profits Alert