"The current environment is one of the most challenging I have seen in the twenty years I have been following the market," says Nate Pile, who has added some ETF hedges to his Nate's Notes portfolio.

"I am also introducing two ETFs this month that can be thought of as 'indirect hedges.' Rather than being a 'short' fund, we are choosing funds that track commodity prices, which in turn, will provide a hedge against any market declines that may result from investor concern about rising inflation.

"In addition, these two new ETFs is may appreciate in value even if the market does rally from here. I actually think there is a very good chance we will make money on these 'commodity ETFs' regardless of what the stock market does next. Anyhow, without further ado, I present to you the following two ETFs:

"The PowerShares Deutsche Bank Commodity Index Tracking Fund (ASE: DBC) is designed to reflect the performance of the Deutsche Bank Liquid Commodity Index, an index that tracks six important commodities (current index weightings approximated in parentheses): light crude (33%), heating oil (19%), wheat (14%), corn (12%), aluminum (12%), and gold (10%).