Five ETFs For A Santa Clause Rally

With less than three hours remaining in Friday's trading day, the day's gains, assuming they hold, aren't going to set the world on fire. However, U.S. stocks are cruising toward their best one-week performance since 2008 and this week has brought a flurry of good U.S.-specific news. The week got started with news of a record-setting Black Friday shopping weekend. Expectations were high for a record Cyber Monday as well. Today, the Labor Department said the unemployment rate dropped to 8.6%, the lowest level since March 2009. We're not saying all of the world's macroeconomic problems have suddenly disappeared. They have not, but this is historically a good time of year to own stocks and it's beginning to look like investors may just be treated to a legitimate Santa Claus rally this year. After today, there are 19 trading days left in 2011 and these are some of the ETFs you'll want to warm up to for a Santa Claus rally. Market Vectors Coal ETF

: We noted

coal stocks have a lot of room to run in 2012. Some of have started to perk up in recent days and that has helped the Market Vectors Coal ETF post a double-digit gain over the past week. A Santa Claus rally should benefit high-beta fare and obviously KOL fits that bill. Plus, the advantage of getting involved with coal right now is that if coal stocks do rebound in earnest in 2012, you'll already be in KOL, not trying to chase a rally in a volatile ETF. Add into a position in KOL above $39. iShares Dow Jones US Consumer Services ETF

: As we noted on Thursday, the time is right to

. Standard & Poor's likes IYC and why not? The 200-stock ETF devotes 10.5% of its weight to Wal-Mart

and Amazon

, two prime Santa Claus rally destinations. Not to mention, the best time to actually own retailers is in the first quarter, so consider buying IYC now as a way of positioning yourself for a bigger rally early next year. A move above $75 could take IYC to $80 and beyond. Vanguard Growth ETF

: We've liked the Vanguard Growth ETF for a while as its heavy combined weight to discretionary and technology names should mean now is the prime time to own ETF like this. The past month has been disappointing for VUG, but things look to be improving as the ETF has surged almost 5% in the past week. Strong retail sales and a rebounding Nasdaq will carry this ETF higher. Global X Social Media Index ETF

: The Global X Social Media Index ETF has been on the receiving end of an amount of press that would make a five-year old ETF jealous. And all of those headlines have been generated in about two weeks time. Outside of Groupon

, SOCL isn't loaded with stocks that should benefit from increased consumer spending, but the ETF is worth a look because it seems the IPO market is perking up. A successful Zynga IPO could help SOCL because the stock is likely to find its way into the ETF and news of Facebook's IPO should shine a positive light on SOCL as a way to get access to multiple social media high-fliers in one ETF. SPDR S&P Dividend ETF

: Easily the most conservative ETF on our list, the SPDR S&P Dividend ETF could easily find its way back to its 52-week high in a matter of days. Again, this is a position play. The first quarter usually brings a spate of dividend increases and many of SDY's constituents raise their dividends in the January-March time frame. A Santa Claus rally and a strong January could have SDY threatening its all-tim high just below $66 late in Q1 2012. Bull case: Consumers keep feeling good. Jobless claims drop (we don't get another monthly jobs report until next year). Fund managers do some year-end buying to show clients they're not missing out on the rally. Bear case: Economic data sours and Europe gets worse, not better.