All four major stock averages closed higher for the week.  This was the first time in three weeks that stocks closed to the upside.

However, the higher close comes with a caveat. The S&P 500 Trust Series ETF(SPY) - Get Report volume was the lowest since the week ended ending Aug. 19.

The Dow Jones Industrial Average gained 7.5 points, the Nasdaq increased 39.36 points, the Russell 2000 IndexFund grew50% and the S&P 500 gained 7.56 points for the week.

SPY volume traded 360 million shares for the week.

When markets move higher for the week on low volume and no change in volatility, this is called a "head fake" weekly rally.

Traders should not be lulled into thinking the market is going higher from here. Instead, it would appear that the stock indexes are headed for lower prices next week.

From a geopolitical risk perspective, this week saw the Philippines ally with China, and Japan reach a preliminary arrangement with Russia.  Neither is a positive for the United States.

In addition, and perhaps most important, our proprietary trading system now shows that the CBOE Market Volatility Index (VIX) will be deep oversold on a daily time frame with a down open when trading resumes next Monday. Coupled with a weekly VIX trading pattern that has a stair-step higher appearance, the stock indexes appear to be poised for a lower trading week ahead.

When the VIX trades with a 12 handle -- the VIX closed at 13.34 -- and Volatility increases to the upside, the markets are set up for a big move to the downside.

Do not be complacent as a trader.  The markets are extremely vulnerable to the slightest bad news and the downside can be painful.

We continue to like gold and gold miners as the asset class of choice. Both the SPDR Gold Trust(GLD) - Get Report and the Daily Gold Miners 3x Shares(NUGT) - Get Report closed the trading week on the upside, but are still oversold on a weekly time frame and poised for higher prices ahead.

Attached is the Daily chart of the VIX where it clearly shows, after being down four consecutive trading days, an oversold SST Strategic Number with a down open next Monday. The SST Number will be 6.

This article is commentary by an independent contributor. At the time of publication, the author owned NUGT.