iPath Series B S&P 500 VIX Short-Term Futures ETN [VXX] Stock Forecast

Volatility strategy may be in order as U.S. default worries rise.

The VIX's base level has been rising since late 2017, indicating the increasing demand for price insurance on S&P 500 stocks. Geopolitics, COVID-19's legacy, a looming U.S. debt crisis, and a bearish stock market trend make the VIX a buy on dips.

The VXX ETN gives investors exposure to short-term VIX futures. The VXX was popular among day traders due to it's ability to deliver exceptional returns during market drawdowns.

VXX has tremendous tracking error. The fund appears to regularly destroy value through constant rollovers from month to month.

The CBOE Volatility Index and volatility-related exchange traded funds jumped Friday on growing anxiety over the pace of the Federal Reserve's future interest rate hikes. Among the best performing non-leveraged ETFs of Friday, the iPath Series B S&P 500 VIX Short Term Futures ETN (VXX) increased 4.

While observers have been warning of an imminent economic recession that could drag down the markets, the CBOE Volatility Index, or VIX, and related exchange traded funds remain relative lax, reflecting ongoing complacency in equities. Year-to-date, the iPath Series B S&P 500 VIX Short Term Futures ETN (VXX) increased 18.

Most of the bank's exchange-traded notes to resume normal operations in August.

Despite the ongoing uncertainty, equity declines have been orderly with no real extreme market moves as reflected by the CBOE Volatility Index and VIX-related exchange traded funds. Year-to-date, the iPath Series B S&P 500 VIX Short Term Futures ETN (VXX) increased 20.9% and the ProShares VIX Short-Term Futures ETF (VIXY) advanced 14.1%.

The CBOE Volatility Index, or so-called VIX, and related exchange traded funds have seen some wild swings this year, and volatility traders are hedging against even bigger oscillations ahead. Year-to-date, the iPath Series B S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) increased 19.6% and the ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY) advanced [.

The year, so far, has been caught up with high inflationary pressure across the world due to supply-chain issues, the Russia-Ukraine war, high energy prices, a commodity super-cycle, a super-hawkish Fed.