MOST READ: Best ETFs for the Rest of '08

More than three-quarters of all ETFs are sitting in negative year-to-date territory as we approach the end of the second quarter, leaving investors wondering whether there's hope for the rest of the year.

The financials, oil, the dollar and commodities have been among the dominating themes in the first half of 2008, and the challenge is to figure out what trends will dominate in the latter half.

Tom Lydon, president and portfolio manager for California-based Global Trends Investments sees the dollar gaining momentum over the next six months. One of his top picks among ETF names is the PowerShares DB U.S. Dollar Bullish Fund(UUP Quote - Cramer on UUP - Stock Picks).

"The Treasury and the Fed have sent signals that they want a stronger dollar, and they're ready to defend it," he says. "The U.S. hasn't intervened in the currency markets since 2000, and Bush has preferred to let market forces do their work. But this trend seems to be changing."

Lydon notes that the FOMC might not bail the dollar out right away, but rather take a wait-and-see approach.

"The Fed might raise interest rates to boost the dollar, but it might not be immediate -- keeping rates steady for now is important for the economy's recovery," he says. "The dollar is at its strongest point in three months now."

Lydon also likes China, and thinks that homebuilding is a sector to keep an eye on. With top holdings such as CNOOC(CEO Quote - Cramer on CEO - Stock Picks), PetroChina(PTR Quote - Cramer on PTR - Stock Picks) and China Mobile(CHL Quote - Cramer on CHL - Stock Picks), the iShares FTSE/Xinhua China 25 Index(FXI Quote - Cramer on FXI - Stock Picks) is his other top pick for the second half.

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