Many of the most beaten-down sectors and exchange traded funds (ETFs) are poised to outperform in a market rebound. With this in mind, there are a few ETFs and sectors investors may want to watch for signs of life.

It is pretty safe to say that the market and economy isn’t going to bounce back overnight, but as history has proven itself, in due time we will all be telling stories about how hard we got hit during the terrible market crash of 2008.

Glenn Curtis of Minyanville suggests the following sectors will be the the first to bounce back:

  • Homebuilders. If growth and optimism return, Americans will likely resume to search for the “American Dream.” If this is the case, take a look at the SPDR S&P Homebuilders (XHB), down 53.9% over the last year.

  • Financials. A rebounding economy means more dough to spend and invest.  Keep an eye on the SPDR Select Sector Financial (XLF), down a whopping 72.5% over the last year.

  • Automotive. With a bounce-back in the economy will come a boost in consumer confidence and a jump in consumer spending, this in combination with a revamp in some fundamentals to make themselves more competitive, could shoot both Ford (F) and General Motors (GM) stock through the roof. There’s no auto ETF, but watch one of the retail-focused ETFs, such as Retail HOLDRs (RTH), down 11.1% year-to-date.

I am sure we all can’t wait for this happen.  It is imperative that we stay somewhat optimistic, because in due time the economy will shine.  But remember not to get overly excited and watch the trendlines before you make your move.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.