With May selling behind us it is time to drift over to the long side of the market. Selling in May and going away played out well for those short the market or with portfolios properly hedged.

 

Now that summer is coming, investors can position for the proverbial summer rally. The economy may be showing signs of weakness, but corporate earnings are still strong. It is those profits or the promise thereof that will lift stocks.

 

June is somewhat of a quiet month as the second quarter winds down. I expect investors to nibble at stocks here in anticipation of good profit numbers to be released in July. I would buy the rumor.

 

The ETF to buy this week is the iShares S&P North America Technology and Multimedia Fund (IGN).

 

To the extent stocks rally this week I expect technology shares to get a lift. The market is all about smart phones and tablet computers. The penetration of both products will continue to increase.

 

As for the other four ETFs to buy, I would still maintain a fairly conservative approach. We have made solid gains here that are worth protecting. That means sticking to larger cap stocks and dividend plays.

 

I’d also keep a small amount allocated to the short side of the market. This will prevent you from fully capitalizing on a rally, but it will protect you should that rally fail to materialize.

 

At the end of this week the market will see the next jobs report. With economists already lowering GPD growth forecasts will we see weakness in the jobs number? Anything is possible.

 

The least likely outcome for stocks is a monster rally. I think we are in a period of slow gains followed by marginal corrections. Two steps forward, one step back.

 

Here are the five ETFs to own this week:

 

ProShares Short Russell 2,000 (RWM) – The RWM will be the insurance policy this week. It will drag us down if stocks are up and it will protect capital if stocks are down. As we get closer to a true summer rally – in July, we can take away this insurance.

 

iShares S&P North America Technology and Multimedia Fund (IGN) – Being short technology stocks in May helped us to positive returns with our five picks here. We’ll switch out the short position in favor of a long technology ETF as we enter the summer season. The economy is stronger than many think and this fund will lead the way as stocks move higher.

 

SPDR Dow Jones Industrial Average (DIA) – At some point Dow stocks will generate interest from the momentum crowd. For now, these stocks are valued nicely and offer protection should the market move lower.

 

PowerShares Dividend Achievers (PFM) – The PFM was a stalwart performer in May. I expect that to continue in June. In a period of uncertainty this ETF is a good place to be.

 

SPDR S&P 500 (SPY) – I’m overweight large stocks with these five picks, but that’s okay. I simply don’t see compelling value elsewhere. I also like the stabilizing impact of large stocks in a portfolio. It may be a bit conservative, but that is what absolute returns are all about.

 

Keep an equal weight in the five picks above.