If history is any indication of what the market holds for us, September is likely to be a rough ride for stocks once again, with volatility rising as investor fears are broadening.

August was a brutal month for markets, as stocks dropped precipitously from their all-time highs, beginning with six consecutive down days in the market, amid turmoil from a trade war with China, unsatisfying resolutions from the Federal Reserve, and global economic stability.

“August has a reputation as a volatile month, and it sure delivered this year,” wrote Ryan Detrick, senior market strategist for LPL Financial, in a Friday note “Over the past month, we’ve not only seen the worst three days of the year but many 1% swings in both directions.”

While markets were eventually simply oversold from the precipitous six-day decline, China’s central bank pegged the yuan’s official reference point at more robust level than the key 7 yuan-to-the-dollar point, a move that assuaged the currency markets, which were at first terrified by fears that the U.S.-China trade war was devolving into a currency war. However, downdrafts renewed in the second half of August, as investors continued to fear a swift resolution to the trade war.

The Key Is Stabilization

“Going forward, stabilization in the U.S./China trade war is now the most important key to broader market stabilization,” said Tom Essaye, founder of The Sevens Report, in a note. “If the escalation continues, that will cause a further pull-back, regardless of what the [Federal Reserve] is going to do. And, I say that because another 25 or 50 basis points of easing by the Fed won’t materially offset a protracted and escalating trade war.”

Throughout the last 100 years, the Dow Jones Industrial Average has averaged a substantial slump during September. “Unfortunately, we’re finally at the worst month of the year from a seasonality perspective,” wrote Justin Walters of Bespoke Investment Group in a Friday note.

While a 15% U.S. tariff on roughly $112 billion in Chinese goods took effect this weekend, essentially adding a tax on about two-thirds of consumer goods coming from China, successive tariffs were also instituted on U.S. goods entering China. Analysts see continued weakness in the global economy as well.

“The global macroeconomic picture continues to show fragility,” Katie Nixon, CIO at Northern Trust Wealth Management, wrote in a note. “We expect overall growth to trend lower under the weight of growing trade uncertainty.”

Related: Experts See The Market Holding Up Well Given News 

It’s not all bad news however, as volatility offers the opportunity for the bold. This resurgence in volatility can certainly spark a continued market downturn that could give the Direxion Daily S&P 500 Bear 3X ETF (NYSEArca: SPXS) a boost.

SPXS seeks daily investment results equal to 300 percent of the inverse of the daily performance of the S&P 500 Index. The fund, under normal circumstances, invests in swap agreements, futures contracts, short positions or other financial instruments that, in combination, provide inverse (opposite) or short leveraged exposure to the index equal to at least 80 percent of the fund’s net assets (plus borrowing for investment purposes).

Meanwhile, those investors who see contracting volatility could look at a more traditional bullish stock allocation with ETFs like the UltraPro Long S&P 500 ETF (UPRO) or the Direxion S&P 500 Bull 2x ETF (SPUU).

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