It may or may not be too late to stop the bleeding, but just in case the overall market still has room to drop, the following ETFs can help soften the landing. SEC rules are in place to prevent short selling of financial stocks, but ETFs like the Short Dow 30 (AMEX:DOG) offer investors the opposite of the negative returns that investors have been experiencing in the past few months. (For more reading on ETFs, check out Five Ways To Find A Winning ETF.)

Blue-Chip Protection
On October 6, the Dow Jones Industrial Average (DJIA) dropped another 3.59%, closing at 9,955.5 on a day when the index experienced a nearly 800-point drop during intra-day trading, falling below 9,600. Every stock on the DJIA finished in negative territory with Exxon Mobil (NYSE:XOM), General Electric (NYSE:GE) and Pfizer (NYSE:PFE) proving to be the most resilient, falling 0.80%, 0.88% and 0.32%, respectively, on the day.

For investors who choose to limit their portfolio to this list of blue-chip stocks compiled in the DJIA, the DOG ETF offers downside protection. DOG was up 2.59% on the day and the ETF is up 23.74% since the beginning of the year. (Looking for a good read? Check out "Widow And Orphan Stocks": Do They Still Exist?)

The Magic Of "1" For The PEG Ratio
Value investors could look at the low price/earnings to growth (PEG) ratios of 0.97 and 0.98 shared by Exxon and GE, respectively, as a clue to the stocks' buoyancy. A PEG ratio below "1" suggests strong future earnings growth for the companies over the next five years. Pfizer, by contrast, has a much higher PEG ratio of 2.08, suggesting that its future earnings potential is not as bright.

The Magic Of "1" For The P/S Ratio
Exxon and GE also share low price/sales (P/S) ratios of 0.94 and 1.19. The P/S ratio can be used to measure a company's stock price against its revenues for the 12 previous months. A P/S below "1" indicates a value play since it means, in the case of Exxon, that investors are paying 94 cents for each $1 of revenue generated.

Final Thoughts
It's as easy to recommend short-selling ETFs now as it may have been to recommend an investment in a China-focused ETF like the PowerShares Golden Dragon Halter USX China (AMEX:PGJ) after its 53% and 64.6% returns in 2006 and 2007. The point is that buying in the PGJ ETF at the beginning of the year would have yielded a -46.73% year-to-date return for investors.

Buying into the short-selling ETFs could be a saving grace if the market continues to drop, but investors should look to them more often when the market has pushed through upper limits, like the 14,000-plus barrier the DJIA crossed back in October 2007.

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Tickers in this Article: DOG, XOM, GE, PFE, PGJ

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