Claymore/MAC Global Solar Energy Index ETF (TAN) +13.8%

Strength from global markets helped solar energy ETFs surge higher this week, leading TAN to break through its 50-day moving average for the first time since its decline in early May.

Going forward, alternative energy bulls should remain cautious before diving into TAN or any solar ETFs. The success or failure of the companies underlying them will depend on whether governments around the world continue to support them with subsidies. If these countries instead decide to focus on taming their looming budget gaps, these subsidies may be cut.

iShares MSCI Spain Index Fund (EWP) +12.1%

The most troubled of the European Union constituents found some welcomed strength this week, raising EWP and iShares MSCI Italy Index Fund ( EWI) to two of the top positions among the entire ETF industry. As investors moved away from defense in favor of riskier assets, the euro grew, which in turn contributed to abovementioned ETF ascension.

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Broad Europe-focused ETFs including iShares EMU Index Fund ( EZU) and PowerShares FTSE RAFI Europe Portfolio ( PEF) were big beneficiaries as well.

iShares Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ) +7.7%

More than 80 days have passed since oil began pouring from the remains of the Deepwater Horizon oil rig, but this week we received word from BP that their relief well is in the final stages of completion. This news coupled with a jump in crude prices helped push IEZ higher for the week.

iShares MSCI Australia Index Fund (EWA) +8.1%

The Australia ETF rallied this week as nations around the world hinted that the economic recovery is still in full swing. Additionally, a strong jobs report from the nation helped fuel the fund's gains.

Chinese demand will likely play a strong part in keeping the miner and materials-heavy EWA portfolio buoyed. Looking ahead, investors looking to play this ETF will want to keep a close eye on China to ensure that they can keep their economic picture strong.


iPath S&P 500 VIX Short Term Futures ETN (VXX) -14.6%

The bulls at last garnered some strength, pulling the markets higher over the course of this shortened week. With newfound confidence, investors are piling into riskier assets and pushing the VIX-based ETFs lower.

As a whole, I remain confident that we are on the road to economic recovery. That being said, I believe that this path will not be a smooth ride; investors should avoid unloading all of their defensive plays in light of this recent stretch of gains. Stable positions like SPDR Gold Trust ( GLD) will continue to be essential for weathering economic turmoil in the future.

United States Natural Gas Fund (UNG) -5.5%

Over the past few weeks, natural gas prices have staged a dramatic reversal, tumbling back towards levels last seen at the start of June. This week, the UNG faced pressure after a dismal storage report from the Energy Information Administration.

While I believe energy will be an important sector to watch in the second half of 2010, I advise against playing any fuels using futures-backed products like UNG. The First Trust Revere-ISE Natural Gas Index ETF ( FCG) should be a stronger, more stable alternative.

Don Dion is president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

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