The CBOE Volatility Index (CBOE: VIX), tracked by the ProShares Ultra VIX Short Term Futures ETF (ARCA: UVXY) and other tickers, was falling about 1.6% Friday after bouncing up off the $13 mark on Wednesday and Thursday to print a quintuple bottom pattern.

Traders and investors are looking ahead to July 25 and 26, when the Federal Reserve is scheduled to meet and decide whether to apply another rate hike after pausing its campaign in June.

The VIX is used to measure the expectation of near-term volatility in the stock market, and volatility is used to gauge market sentiment, specifically the level of fear that exists in the S&P 500.

Stock market volatility holds support ahead of key fed rate decision. The stock market appears to be attempting to price in a hawkish tone from the Fed and that, paired with big-tech earnings season, could cause volatility to increase

Traders wishing to trade the volatility in the stock market can use MIAX’s SPIKES Volatility products. The products, which are traded on SPIKES Volatility Index (XMIO: SPIKE), track expected volatility in the SPDR S&P 500 ETF Trust (NYSE: SPY) over the next 30 days.

The VIX Chart: The VIX hasn’t traded at the 13 level since February 2020, prior to the COVID-19 pandemic beginning in the U.S. The area has been holding as solid support and the index has bounced up from the area on five occasions since June 23.

Produced in association with Benzinga

Edited by Saba Fatima and Maham Javaid