“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.” – Alan Greenspan

A nervous market nevertheless finished nearly flat with the S&P 500 (SPY) lower for a fourth consecutive week by just -0.7% and the NASDAQ 100 (QQQQ) higher by +0.4%. However, at one point before Friday's last hour rebound, the VIX had run up +30% from earlier in the week and the S&P 500 had tagged its 200-day exponential moving average for a near "official" correction of -9.2% off its January highs. This action had the Market Rewind ETF rotation models seeking safety for the first time since the 2009 March lows.

(Click Image to Enlarge/ ETF Rewind Glossary)

Crude was down 5% today, which hurts, being we’ve let a winning trade become a loser for clients. They are out of all their futures with no damage done but still hold May $7 call spreads. Relatively speaking we are only back to levels from 4 days ago but the path we took here is why I’m concerned. On a $2 bounce in the futures they should be able to get back to cost. We advised clients to go flat on all their natural gas. We used the near 10 cent correction in RBOB today to buy; clients are long 12 cent call spreads in June. We used a day like today to buy because premiums were hit hard.

The rally we were looking to sell never materialized and with Indices making new lows into the close we may miss the trade on futures. We will have an option strategy in coming sessions but no doubt the trend is DOWN. We highly suggest lightening up on your equity exposure or implementing hedging strategies.