Opportunistic traders can look to something like the Direxion Daily Financial Bull 3X Shares (NYSEArca: FAS) and Direxion Daily Regional Banks 3x Bull Shares (NYSEArca: DPST) to capitalize on short-term views on further strength in the financial sector, or utilize the Direxion Daily Financial Bear 3X Shares (NYSEArca: FAZ) and Direxion Daily Regional Banks 3x Bear Shares (NYSEArca: WDRW) to express short-term hedge of the opposite if your view is mean reversion.
The Direxion Daily S&P 500 Bull 3X Shares (NYSEArca: SPXL) could help traders capture a rally in large-caps as we continue to see deregulation, favorable tax policies and potential mergers ahead to support market moves.
On the other hand, Jablonski warned of ongoing uncertainty and potential volatility that remains a risk to investors.
“On the inverse side, we have these negative one beta tools,” Jablonski added. “They’re tax efficient, they’re inexpensive – they’re 45 basis points, and they essentially allow an advisor advisors to have a long-term hedge in his or her portfolio.”
For instance, Direxion recently launched the Direxion Daily Consumer Staples Bear 1X Shares (NYSEArca: SPLZ) and Direxion Daily Utilities Bear 1X Shares (NYSEArca: UTLZ) to hedge against weakness in the consumer staples and utilities sectors.
Fixed-income investors may also hedge against the Federal Reserve interest rate hike through inverse or short Treasury bond ETFs, such as the Direxion Daily 7-10 Year Treasury Bear 1x Shares (NYSEArca: TYNS) or Direxion Daily 20+ Year Treasury Bear 1x Shares (NYSEArca: TYBS).
Click here to read Direxion’s 2017 Outlook on ETF Trends and NYSE’s exclusive 2017 Market Outlook Channel.