Stock market volatility is becoming a common occurrence.

On Tuesday, the DJIA was higher by 116 points before losing all those gains. At the close, the DJIA finished higher by 6.49 to close at 17,489. The S&P 500 lost 2.75 points to close at 2,050 while the Nasdaq gained just 1.39 to close at 4,986. The Russell 2000 lost 2.87 to finish at 1,153.

According to the Investment Company Institute, in the five-day period ending November 4, investors in domestic equity mutual funds withdrew $12.1 billion, the largest weekly draw down from the asset class in more than four years.  Domestic equity funds have now lost in excess of $137 billion by way of investor redemptions in 2015. That is more than during the same period in 2008.

Also, U.S. industrial production slowed to its lowest reading of 2015, coming in at 0.3% year-over-year. This latest data point goes along with the retail sales miss and producer prices miss that was reported earlier. Again, if the Federal Reserve is serious about being data dependent, how do they raise interest rates in a growth slowing economy?

The Fed continues to signal that they will raise interest rates in December. Most economists and Wall Street pundits expect a rate increase. I do not.

If the Fed raises rates in December, there will be a reaction where capital will flow out of emerging markets, the dollar will continue to get stronger, import deflation and a slower U.S. economy. That is the exact opposite of what the Fed wants. All of this will occur at a time when the global economy is already slowing.

Thus, if the Fed does raise rates, it would appear that the domestic equity markets in the U.S. will see a huge selloff along with equity markets around the globe. Currently, the markets appear confused and that is what is causing this extreme volatility on a day to day basis. If the Fed does not raise rates, the markets will be given the green light to move higher and the dollar will get weaker.

Caution and making quick trades would be the proper course of action over the next month.

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Attached is a weekly chart of the PowerShares DB US Dollar Index Bullish Fund(UUP) - Get Report . It is overbought on the weekly time frame in anticipation of an interest rate hike.

On Tuesday, we sold our Intel long position that we purchased for a profit.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.