Santa Claus Rally: Can you ride along?

Now that we're in the stretch between Christmas and the New Year, we are officially in the span in which an annual market phenomenon occurs: the Santa Claus rally.

Today was a good, if mild, start to the rally, with technology (and the Nasdaq), leading the way. From now until year end, I'd expect technology and financial services to rise, as they have been the hardest hit.

The big financials still have a huge hole to dig themselves out of. However, I think their future is bright. While they cannot continue making obscene amounts of money from subprime mortgages and the securitization market, they will still truck home cash to every investor.

For this reason, I bought XLF today. XLF is an ETF index of financial stocks, with big names such as Merril Lynch, Goldman, Bank of America, and Citigroup. This ETF has been hammered this year, losing about 17% of its value. I foresee a bounch back in most of the financials within a year.

And of course, my consistent favorite QQQQ (ETF of Nasdaq), continues to be another recommended buy.