World equity markets may finally have hit a corrective phase. Indeed, it's been a long while since we've witnessed 3 consecutive days of selling.

Still, if the long-term trend is one's friend, one should have little difficulty identifying an ETF/ETN vehicle in a technical uptrend. There may be 500+ ETF/ETNs listed on the U.S. exchanges where current prices are above respective 50-day and 200-day moving averages.

Is there a way that the prevailing winds could shift? Yes... if the U.S. dollar collapsed or if the U.S. dollar catapulted to lofty heights. In contrast, a slow-n-orderly descent of the greenback whets investor appetite for risk, while a firming of the buck would do little more than feed the health-restoring pullback.

I do not believe that the U.S. dollar is in imminent danger (with an emphasis on the word imminent). What's more, I agree with most folks that the probability of a 7%-11% is quite high. It follows that the question becomes, Which ETF should I buy on the dip(s)?

Here, then, are a few ideas:

1. ProShares UltraShort 20+ Treasury (TBT). Is there anything more dangerous than a 4.10% yield on the 30-year bond? Are you kidding? Bill Gross may be purchasing long maturity bonds with 4.25% yields for his flagship Pimco Total Return. Yet one of the most admired names in hedge fund history, Julian Robertson, expects rates to skyrocket.

You won't need much for an investment in TBT to skyrocket. The Fed plans to exit from the practice of buying long-date U.S. Treasuries in October. Foreigners have already scaled back on buying U.S. bonds with maturity dates beyond 10 years. And there's a fairly strong likelihood that the 30-year will see 5% before the year is out. TBT investors would be richly rewarded.

2. WisdomTree Emerging Market Equity Income (DEM). The premise here is that the ETF serves up an annual yield of roughly 6% distributed all at once at the end of the year. As much as I may prefer the ease and straightforward allocation of Vanguard Emerging Markets (VWO), a final year-end push coupled with a bonus income payment should make DEM a better intermediate-term performer.

3. iShares Global Energy (IXC). Clearly, many investors hope to balance a reliable income stream with a reasonable potential for appreciation. Telecom and utilities are consistent with income, but shaky on growth potential. Technology has an exceptional shot at capital appreciation, yet the income component is negligible.

Look to global energy a la oil and gas. It is one of the few sectors where the companies collectively show increases in dividend payouts over 3 years. What's more, the annual average payment for individual energy companies approximates 5%.

Granted, this may make the one-time distributions of WisdomTree International Energy (DKA) more attractive than iShares Global Energy (IXC). And I wouldn't fault you for running with DKA. Yet the volume on DKA is super thin, making the entry and exit price difficult.

Outside of my 3 favorites, I am always partial to foreign bonds for diversification and income. According to EPFR Global, $2.16 billion went into global bonds last week, with roughly one-quarter of those dollars streaming into emerging market bonds. What's more, global bond funds have seen inflows every week since the week of 4/6/09-4/10/09.

It appears that investor willingness to invest in something... anything... may have kicked in about one month after developed world markets bottomed in early March. If some comfort had been established one month after the party officially started, will risk aversion via fund outflows occur one month after a stock pullback begins? And if so, will foreign bonds and emerging bonds be hindered or helped in the process?

It's true that foreign bond ETFs and emerging bond ETFs may be hurt if stock risk aversion is accompanied by a strengthening of the U.S. dollar; Indeed, foreign bonds could be adversely affected by currency risk.

That said, the U.S. stock market and foreign bonds have a longer-term history as non-correlating assets; foreign bond ETFs and emerging market bond ETFs can still zig, even if stocks zag.

What's more, it is still probable that shorter-term U.S. dollar gains will eventually give way to longer-term weakening. And that's going to help foreign bond ETFs and emerging market bond ETFs. Look for iShares JP Morgan Emerging Market Bond (EMB) and SPDR International Treasury Bond (BWX) as potential pickups in a pullback.

If you'd like to learn more about ETF investing... then tune into In the Money With Gary Gordon. You can listen to the show live or via podcast or on your iPod.

Disclosure Statement: ETF Expert is a web log (blog) that makes the world of ETFs easier to understand. Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC, may hold positions in the ETFs, mutual funds and/or index funds mentioned above. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.  

You can view Gary's daily market commentary at www.ETFexpert.com.  You can also email him directly at garygordon@mypacificpark.com.