"The great stock pick for 2009 is not a stock -- it is a high risk, extremely volatile ETF," says short selling expert Michael Shulman, who work is designed for sophisticated investors.

In his ChangeWave Shorts advisory, he explains,  "The Proshares UltraShort Financials (NYSE: SKF) is an inverse double ETF; in other words its move twice as much -- and in the opposite direction -- from the Dow Jones Financial Index."

"When the Dow Jones Financial Index goes down one percent, this ETF goes up two percent. High risk, high reward, very high volatility.

"The range in 2008 was $87-$304. You have been warned - but please, keep reading, because even if you don’t buy this ETF, consider my suggestion a warning not to buy financial stocks in 2009.

"The current wisdom is the lion’s share of the problems with the big banks is over and if there is a concern it is earnings power going forward. 

"When Wall Street realizes problems with current assets - meaning the debts and bonds and other obligations the banks have on their balance sheets or hidden off their balance sheets  -- is much larger and growing than in current stock prices, watch out. 

"And they will -- banks eventually have to be more transparent than other companies -- even off balance sheet jugglers like Citigroup -- and eventually these numbers bare their fundamentals. Which are a mess now and are going to get worse in 2009.

"The core, as always, is housing -- and falling home prices - and defaults and foreclosures -- and more bad mortgages than forecast. Again. One in 11 American homeowners is in default or foreclosure. 

"One in five or one in four -- depending on who you read -- lives in house worth less than their mortgage. And Americans are not paying their mortgages on time. Oh, more than half of modified loans are back in default or foreclosure.

"Wait, wait -- the Fed is buying this stuff. Wrong - the Fed is buying new stuff -- and according to its’ charter, not policy but its legislative mandate, the Fed can only buy high quality debt. So, forget the bad stuff that is killing everybody.

"So bank balance sheets are not only not going to get stronger in 2009, housing is going to make them weaker. And they are weak to begin.

"This is best illustrated by Citigroup and its use of their 'off balance sheet' to shield assets of unknown value. Citigroup has more than $1.2 trillion dollars in off balance sheet assets of unknown quality. That is trillion with a T. 

"Other problems brought on by the credit bubble, the credit crash and the recession? Did you know $530 billion in commercial property loans come due in the next three years and there ain’t no money to roll them over? 

"Or that credit card debt is not longer being securitized as no one will buy the bonds? And this stuff stays on bank balance sheets. And again, Uncle Ben cannot buy them unless they are very highly rated and have truly secure collateral.

Y"If, as we expect, the sector will be taking another big leg down due to these fundamentals, you can play the whole sector with an ETF.

"And if you can tolerate the risk, you can get double the bang for your money with the double inverse ETF of the Dow Jones Financial Index, the SKF.

"This ETF is very liquid, trades like a stock and is very volatile.  It has broken investors hearts and made them a lot of money last year.

"The trading range for the ETF in 2008 was $87 to $304, almost a four fold swing. In my opinion, everything says the banks have another major leg down in 2009."