Industrial and technology stocks led the market to a triple-digit rally this week, all because The Boeing Co. (NYSE: BA) said it was boosting production and a forecast that demand for computers would increase. Well, I don’t know if Americans need more planes and computers, but I can tell you that the double-dip recession is right around the corner, if not already beginning.

And there are three sectors in particular that investors need to avoid — or if you, like my subscribers to The Short Side Trader, want to make money rather than just watch — sectors you can short.

So keep reading to find out what they are and what stocks and exchange-traded funds (ETFs) you can use to profit from their downfall.

Sector to Avoid #1: Financials

Go back three years, take the accounting rules that were the law of the land at that time, and apply them to U.S. banks today, and you will find many, perhaps most, are insolvent.

The toxic assets on the banks’ balance sheets have not gone away, but the rules requiring banks to properly account for them have. Commercial real estate loan problems have not been resolved, but the rules making banks account for the deteriorating value of assets supporting these loans have. The need for increasing amounts of loan loss reserves for defaulting consumer loans — auto, home, credit card — has not disappeared, but the increases in these reserves have.

The bottom line: Estimates for bank profits are way too high, these stocks are rolling over, and it is time to run for the exits or to short them. To play this sector, consider buying the high-risk, high-return ProShares UltraShort Financials (NYSE: SKF). This double-inverse ETF goes up between 1.5% and 2% for every 1% drop in the Dow Jones Financial Index.

Sector to Avoid #2: Housing

The United States is less than one-third of the way through foreclosures, and foreclosure remediation is a dismal failure, as roughly two-thirds of people getting help eventually default anyway.

There is too much housing inventory, the inventory is growing, and more than 1 million homes in default or foreclosed on have yet to be listed. I expect this situation to continue, which will only put more pressure on prices and new home building through 2012.

The bottom line is that housing and the homebuilders are about to fall off a cliff. Stay away from these stocks or short publicly held homebuilders with put options on the SPDR S&P Homebuilders (NYSE: XHB), the ETF for this sector.

Get the names of two individual housing stocks to short.

Sector to Avoid #1: Europe

I’d like some of what you’re smoking if you think the problems in Europe are going away any time soon. Just this week, Greece’s debt received another downgraded, this time from Moody’s, despite a pledge by Greece’s prime minister that the country would not leave the euro. The entire continent is going to be a mess for quite some time, and the two best ways to play the euro zone crisis are to short currencies and European banks.

However, whatever you do, please do not short currencies directly. That is great way to avoid taxes by going broke. Instead, you can short currencies by buying put options on ETFs representing the euro or the British pound, such as the CurrencyShares Euro Trust (NYSE: FXE) and the CurrencyShares British Pound Sterling Trust (NYSE: FXB).

If currencies are not your cup of grappa, then try the big European banks. They are all highly leveraged, much more so than U.S. banks, with huge exposures to iffy loans that will (probably) be restructured from countries such as Greece. The big players to look at that are listed on U.S. exchanges are UBS AG (NYSE: UBS), Deutsche Bank AG (NYSE: DB) and Banco Santander, S.A. (NYSE: STD).