Bank of America recommends: Short S&P500, Long USD

Wall Street's negative mood may continue after New Year, predicts Paul Ciana, an investment strategist at Bank of America. He has three top ideas for 2019, of which we could take advantage of the market chaos that will obviously continue next year.

First idea: US dollar purchases, S & P500 sales

"If we look at long-term US dollar against the S & P500 as the ratio is less lowest points that ultimately lead to a period where the dollar significantly beat representation S & P500". - Ciana told CNBC on Thursday.

For example, in 2000 the ratio formed bottom before the dot-com bubble burst and sent stocks down and the dollar up. A similar situation occurred in 2008 and in 2014-2015.

"We are now in a similar situation." - he adds.

Second Idea: Purchases of Oil

"We added WTI to our list of ideas because it was the most resold asset at the end of 2018". - says Ciana. "Prices went down from its 200-point creep, just as more markets are positioning to raise liquidity, ending the trend in 2018."

Third idea: Sales of 10-year bonds at their current yield rate of 2.80%

The bond rally was suppressing their yield, but Ciana expects this trend to turn. When bond prices begin to rise, yields will fall.

"The big question is whether the current rally is over, and if yields will soon find some support for the rising trend, maybe about 2.75 to 2.80, and if these areas stand, we can see a strong sell-off in bonds, and government bonds go up again" .

10-year bonds peaked at 3.23% in November and again in October. This was the highest level since May 2011.

Source: CNBC

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