Over the last few days, markets exploded higher.
All in hopes the Federal Reserve would take a softer stance with interest rate hikes.
Unfortunately, it appears the Fed is ignoring the idea that its current stance could do even more damage. In fact, according to Forex.com: “A long list of Wall Street banks from Goldman Sachs, JPMorgan to Bank of America have warned that an overly aggressive Fed tightening policy, combined with a surging U.S dollar, risks breaking the global financial markets and causing dangerous instability in other currencies.”
Even with warning signs, the Fed will continue to hike rates to fight inflation. That being said, we expect to see a sizable return of volatility in the markets, which is good news for volatility related ETFs such as the ProShares VIX Short-Term Futures ETF (VIXY).
The ETF also just caught double bottom support dating back to early September. It’s also oversold on RSI, MACD, and Williams’ %R, and could rally back to $18 from $14.53.