Five ETFs To Buy On A Pullback

For months now, pundits have been trying to call a top in this market. That's a tough game, almost fool's gold, but as of this writing the S&P 500 is trading around 1,298, a point or two lower and we'll see a violation of support and perhaps a real, legitimate pullback that could be the buying opportunity so many have been waiting for.

Corrections within bull markets, while painful, are historically swift, so it pays to be prepared and arm yourself with a list of buy candidates for when/if the bulls regain control of the market.

Let's look at five ETFs that have had nice runs higher that would make for solid buy-on-a-dip candidates.

1) Industrial Select Sector SPDR XLI:
Industrials have been a market leadership group as investors have started to favor large-cap blue chips, a theme that has sent XLI soaring by 24% in the past six months. A dip to $35 area or a tad lower could represent a solid buy point.

2) iPath DJ-UBS Cotton TR Sub-Index ETN BAL:
BAL can get knocked around on tough days for the broader market, but that doesn't change the incredible fundamentals of the cotton market. If those change, BAL isn't a buy, but if BAL pulls back under $100 just because of broader market weakness, starting a small position could lead to big things.

3) Market Vectors Coal ETF KOL:
In much the same vain as BAL, KOL has a tendency to get beaten up because of its high beta nature, not because the coal's fundamentals are changing. If anything, the outlook for coal prices remains robust. Support is $45 and if that holds, adding KOL to your portfolio for a run to $52 might be a fine idea.

4) Anything Silver:
Yes, silver is looking a little frothy right now, but the reality is the white metal will probably finish 2011 at higher prices than where it currently trades, so consider the iShares Silver Trust SLV, the ETF Securities Physical Silver Shares SIVR or the Global X Silver Miners ETF SIL as pullback buy candidates.

5) Vanguard Dividend Appreciation ETF VIG:
The dividend theme is alive and well and if you're a believer in the S&P 500 finding its way above 1,400-1,450 by year end, scooping up VIG when the index is below 1,300 makes a lot of sense. With a scant expense ratio, VIG is an ideal play for conservative, long-term investors.