The British daily paper

The British daily paper the Independent reported on Sunday that Dow component Exxon Mobil had expressed interest in Gulf Keystone. The Independent did not cite sources. Texas-based Exxon did not comment on the speculation.

The paper reported Gulf Keystone currently has a market value of about $2.33 billion. Exxon is said to be considering a bid for Gulf Keystone that is just under $12.50 a share based on current dollar/pound conversion rates and that it is probable the British firm may reject that offer.

The Independent reported that Chevron (NYSE: CVX), the second-largest U.S. oil company, and China's Sinopec (NYSE: SNP), Asia's largest refiner, are keeping an eye on the situation.

If successful in its bid for Gulf Keystone, the acquisition would be the largest for Exxon since the $41 billion purchase of XTO, which was announced almost exactly two years ago and made Exxon the largest U.S. natural gas producer.

Gulf Keystone makes for an appealing target because the company is believed to be sitting on massive oil reserves in Iraq's Kurdistan region. Last month, it emerged that Exxon was the first of the oil industry's giants to enter Kurdistan, taking six licenses, the Independent reported.

To say that time is running out on a Santa Claus rally is to put things mildly. The reality is we probably want be getting one this year as the performance of U.S. equities this week clearly indicates. All three major U.S. indexes ended the week down more than 1.5%. That's bad enough, but previously reliable gold is in big trouble as highlighted by the 4.2% drop for SPDR Gold Shares (NYSE: GLD) this week and that includes a gain of nearly 2% on Friday.

Oh well. Try again next week, right? Unfortunately, Europe will still be around next week and with no sign the news from across the Atlantic is going to take a sudden turn for the better, the last trading week before Christmas could be marked by light low volume and sideways trading.

Still, there are some ETFs that will be in play so let's have a look at few now.

PowerShares Dynamic Food & Beverage Portfolio (NYSE: PBJ): With General Mills (NYSE: GIS) and Conagra (NYSE: CAG) stepping into the earnings confessional on Tuesday (over 7% of PBJ's weight), the near-term fate of this conservative ETF could be decided as soon as next week. Next week could mean the difference between a positive and negative performance for the PowerShares Dynamic Food & Beverage Portfolios for 2011.

PowerShares QQQ (Nasdaq: QQQ): Not to diminish the impact of the other earnings reports next week, but Oracle (Nasdaq: ORCL) will be the week's marquee earnings play and at over 6% of the PowerShares QQQ's weight, we nominate this ETF as one to trade early next week. If things go bad, trade the ProShares UltraShort QQQ (NYSE: QID).

iShares MSCI Belgium Investable Market Index Fund (NYSE: EWK): It was only a matter before this already vulnerable ETF got bit by the downgrade bug and that's what happened on Friday after the close when Moody's Investors Service lowered Belgium's credit rating. Already down 19% for the year, if support at $10 doesn't hold, the iShares MSCI Belgium Investable Market Index Fund could easily fall another 10% or more.

PowerShares DB Gold Double Short ETN (NYSE: DZZ): Even with a drop of nearly 3% on Friday, the PowerShares DB Gold Double Short ETN still finished the week with a gain of nearly 13%. As hard as it may be for some to believe, gold looks very weak right now and with DZZ trading for just over $5, why not take out some insurance on long gold positions in the form of this ETN?

Market Vectors Indonesia ETF (NYSE: IDX): It didn't surprise us to see Indonesian stocks bounce on Friday and with news of an investment grade credit rating for the fast-growing Asian tiger economy we reiterate the view that the Market Vectors Indonesia ETF is one to watch in 2012. Start early by trading IDX next week.