Consider Hedging Into Next Week (VXX, SDS, QID)

Right now the markets are very calm and volatility has been extremely low. This could, however, be the calm before the storm. Next week we will have the QE announcement from the Federal Reserve as well as the mid-term elections. It would appear that traders have priced in significant quantitative easing from the Fed as well as a Republican victory in the House of Representatives. There is also widespread chatter that the Bush tax cuts will be extended across the board. Essentially, the market may have priced in most of the upside catalysts while disregarding the risks of something unexpected happening. Next week could potentially be explosive. To protect profits on stocks that you don't want to sell yet, consider hedging yourself using ETFs, such as the iPath S&P 500 VIX Short-Term Futures ETN (NYSE: VXX). Other options include the ProShares UltraShort QQQ ETF (NYSE: QID) and ProShares UltraShort S&P 500 ETF (NYSE: SDS).