Looking For An Entry Point 

In order to see a confirmation of this relationship change, he's looking for a breakout by IVV's per share price. That would mean the ETF would have to sell at $99 or greater before he'd move client money into the portfolio. On Tuesday, it closed at $94.19 per share.

"I'm probably going to start to look at initiating positions pretty soon and then add significantly after we see a breakout at around $99 per share," said Zaro.

To play the cap-weighted ETFs, he's also looking at Rydex Russell Top 50 ETF (AMEX: XLG) and the Vanguard Mega Cap 300 Index ETF (NYSE: MGC).

"This is looking like a period when mega-cap stocks could do very well relative to smaller-cap stocks," said Zaro.

On XLG, he's preparing to initiate positions at $78 per share. It enters trading on Wednesday at $75.17. The ETF is heavily skewed toward top holdings such as: Exxon Mobil at 8%, General Electric at 4.5% and Procter & Gamble at 4.4%.

With MGC, Zaro's looking at initiating a partial position in the next few days. He would consider adding substantially to those positions at $34.50 per share. It closed at $33.01 on Tuesday. It has similar names, but different weightings than XLG. For example, Microsoft has 2.5% in the Vanguard ETF, while about 2% in XLG. And MGC's top name is also Exxon, but with half as much of a weighting. 

"The Vanguard ETF has the same basic names, but its weightings are spread around a bit more and it's not quite as top-heavy as XLG," said Zaro.

But he stresses that a more consistent uptrend in the market might be weeks away. "These ETFs are trading at very depressed levels right now that mask their underlying strengths over the longer term," said Zaro. "We're remaining patient, however, and wading back into ETFs that look the strongest to us right now."

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