Using long-term seasonal cycle studies, Sy Harding was 100% invested until mid-May, when he exited the stock market. He notes, "We may have been early in taking bear fund positions, but it has now paid off."

In his Street Smart Report, the advisor now says, "We continue to expect the low won't be seen until the October-November time frame." In line with this view, he reviews the "downside ETF positions" in his model portfolio.

The advisor explains, "We believe the correction has just begun. We still expect a decline of 20% or more for the Russell from its peak to its low in the October-November time frame."

In his Aggressive Seasonal Timing Strategy portfolio, the advisor has been holding a pair of exchange-traded funds that bet on the downside: ProShares Short Dow ETF (ASE: DOG) and ProShares Short S&P 500 ETF (ASE: SH)."

For those not holding these ETFs, Harding suggests buying now. He forecasts, "Wall Street and market pundits will be trying to hold the market up by focusing investor attention on earnings. But earnings won't matter as the real problem won't go away."

Harding continues, "The stock market has been held up by the liquidity provided by the huge number of leveraged corporate buyouts, and stock buybacks. And the lending windows at banks and brokerage firms for that type of deal has been closed."

Given this outlook, he suggests, "We have been expecting the financial and consumer retail sectors to be the worst performing sectors once the correction got underway. So we are going to take positions again in two bear-type exchange-traded funds."

As such, the advisor recommends buying ProShares Ultra Short Financials (ASE: SKF) and ProShares Ultra Short Consumer (ASE: SZK). Both of these funds are double inverse funds; in other words, they are leveraged two to one to their respective sectors.

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.