Stock Market Today: Traders Gear Up for Volatility Spike

NEW YORK (TheStreet) -- U.S. stock index futures were pointing to another weak day on Wall Street Tuesday as investors digested a mix of global economic reports and a U.S. clampdown on tax inversions that could hurt corporate deal-making.

Dow Jones Industrial Average futures slipped 42 points, or 26.68 points below fair value. S&P 500 futures fell 5.5 points, or 5.14 points below fair value. Nasdaq futures dipped 13.3 points, or 12.13 points below fair value.

Watch the video below for a look at how U.S. markets are doing in premarket trading Tuesday:

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According to Nicholas Colas, chief market strategist at New York-based global brokerage company ConvergEx Group, many traders and trading desks may soon be getting what they're looking for -- seasonal patterns are strongly favoring more volatility and volume appreciation over the next five weeks, which would help maximize the benefit of taking short positions or selling longs now and buying them back lower later as well as boost trading commissions.

He said the VIX over the last 25 years has never bottomed for the year in October. While the VIX could tread water at the current level of about 13.7, a move to above the February highs of 21.4 cannot be ruled out. Volumes have been on the light side for months, but the strategist wouldn't be surprised to see volumes rise 10% to 20% in October if volatility did indeed increase to the +20 level on the VIX.

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