By now you’ve heard all about the sky falling, so I won’t go into the reasoning behind the collapse of Lehman Brothers (LEH), the troubles at American International Group (AIG) or the lifeline thrown to Merrill Lynch (MER).

Instead, let’s talk about how to profit from it.

I think it’s time to buy the PowerShares DB US Dollar Index Bearish Fund (UDN), which is the inverse U.S. dollar exchange-traded fund (ETF).

I think that, as the U.S. dollar continues its long-term downtrend, it can trade up 20% during the next six to 12 months.

First, let me just say that my stance has certainly changed to where I am more bearish than bullish, because the NYSE Bullish Percent Index (BPI) changed from a column of Xs to Os.

Based on that indicator, I recommended my readers buy put options on the S&P 500 (SPX). We made a 74% profit when the market hit a recent intermediate bottom and the NYSE BPI flipped to Xs again.

The indicator flipped back to Os on Sept. 12, which makes me more bearish than before. I told members of The Trend Rider that it was time to get bearish and recently started entering several bearish positions (and exiting bullish ones).

However, we’re also seeing the sentiment indicators, which are contrary indicators, indicate a near bottom.

So, what we have are two very accurate, time-tested indicators (BPI and sentiment indicators) tell conflicting stories. But, that’s not unusual in a crazy market like this.

So, how do you profit from this horrific market whether this is, in fact, an intermediate bottom, or the beginning of more bloodshed?

Here’s what I’m thinking …

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If you buy PowerShares DB US Dollar Index Bearish Fund (UDN), you are betting against the U.S. dollar — a bet that has been profitable for about six years.

I know all you chartists are probably going to tell me that the U.S. dollar index recently penetrated the long-term downtrend line and will therefore turn around and move higher, but it did that in 2004, too. And in 2004, the greenback only rallied 6% before declining another 22%.

What’s good about this investment is that, if I’m wrong, and the U.S. dollar rallies more, your risk is minimal. Things won’t be getting any better here in the United States for a while.

Before making this recommendation, I was waiting for the Relative Strength Index (RSI) to give us a sell signal after a negative divergence. Well, that’s exactly what we just saw.

The U.S. dollar hasn’t been rallying because the United States is in such great shape. It has been rallying because there has been a global economic slowdown that I talked about two weeks ago in my article titled “Currencies Crashing at Record Rates! Disaster or Opportunity?”

I want to leave you with a recommendation to read another article I wrote recently titled “How to FULLY Insure Your Deposits When Your Bank Closes.”

I say this because the FDIC recently announced a rise in the number of banks on its danger list, from 90 to 117. Imagine if you lose your deposits because your bank folded — and you could have avoided it!

Note: The FDIC does not make its list of member institutions in danger of failing public because it does not want to contribute to a “run on the bank” by concerned depositors.

Chris Rowe is the Chief Investment Officer for Tycoon Publishing’s The Trend Rider. To learn more about him, click here to read his bio.