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3 Trades to Kick Off the Second Quarter

China, short bonds and small caps could be big winning trades in the second quarter

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If you’re a trader — i.e., if you are active with your portfolio and buy and sell stock or ETFs in pursuit of alpha — then the wild gyrations in the market during the first three months of 2014 were likely very interesting.

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If you were long stocks in January, you probably underperformed. If you were short stocks in February, then you also likely underperformed. Of course, those savvy enough to be on the opposite side of those trends did well during those respective months. If you were active in March … well, your results probably bounced around all over the place regardless of your bias.

This year, the climate for traders has been far tougher than it has been in the past couple years. Let’s face it; if you had a generally bullish bias in stocks in 2012 and 2013, you probably did pretty well. So far this year, however, that same bias hasn’t worked as well.

In fact, the market in 2014 is more of what I call a “market of stocks,” rather than a “stock market,” meaning that you can’t just go long and expect to make money big money. We should continue to see this market of stocks in the second quarter, which means that when making trades, you need to focus in on short- and medium-term trends likely to continue over the next three months.

So, which trades are likely to give you some nice performance in Q2? Here are three of my favorites to kick off the second quarter:

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