Like life in the middle ages this weeks sell-off in equities has been nasty, brutish and short. Also like the the forgotten centuries prior to the enlightenment there isn’t much of a legacy to speak of just yet. With a nearly 3% drop over the last five trading days the Dow Jones Industrial Average (^DJIA) has given away its meager gains for the 2014 but the S&P500 (^GSPC) is still well into the green heading into August.

Related: The 20% market correction has already started

Perhaps most importantly to the collective psyche, Apple (AAPL) and Facebook (FB), the twin sweethearts of the American stock market are both well over 30% higher for the year. It’s basically too late to pretend all is well but too soon to buy the dip.

In the attached clip Jonathan Hoenig of Capitalistpig says his favorite trades are away from equities entirely. Hoenig thinks the best opportunity extant is wagering on short term yields to move higher.

Related: Don’t be fooled, all is not well for stocks

“Two year yields and short term interest rates in general have been up for months now,” Hoenig notes, adding that yields haven’t seen these levels since the dark days of 2011. “If you’re looking for longer-term trades right now betting on higher short-term interest rates should at least be on your list."

Hoenig’s favorite way to play this once complex trade is through the iPath US Treasury 2-Year Bear ETN (DTUS).
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