(Bloomberg) -- Rising volatility may be about to test the US stock market’s 13% jump from June lows.

That’s the picture painted by technical charts looking at the Cboe Volatility Index, a gauge of implied equity swings for the S&P 500 known as the VIX.

The VIX has been relatively docile compared to other snapshots of market swings, such as the equivalent measure for Treasuries. But high inflation, aggressive interest-rate hikes and the risk of a recession have left investors fearful of the stock market morphing from sanguine into scary.

“The reality is that the current state of things shows no resolution between the deteriorating growth outlook and the elevated level of US inflation,” Eric Robertsen, chief strategist at Standard Chartered Bank Plc, wrote in a note. This divergence favors “higher, not lower, levels of implied volatility,” he said.

The Cycle

The VIX appears to follow a 20-week cycle of falling to lows and then rebounding. The latest trough is upon us, suggesting an “upward burst” lies ahead, according to Christopher Grafton, London-based managing director at Vectisma Ltd., an independent market analysis firm.

ETF Flows

The $1.3 billion ProShares Ultra VIX Short-Term Futures ETF (ticker UVXY) garnered its largest inflow last month since February 2021. The fund profits when volatility surges. One possibility is that buyers are seeking a hedge for a shift in focus from robust US earnings to troubling economic trends, according to Susquehanna International Group derivatives strategist Chris Murphy.

Dim Outlook

The VIX index fell for seven straight weeks through Aug. 5. An analysis of data going back to 1992 shows that’s happened seven times previously. The gauge climbed by more than five points and the S&P 500 added a paltry 0.6% on average 26 weeks out, according to figures compiled by Bloomberg.

Support Broken

The technical picture isn’t uniformly pointing upward for the VIX, however. The gauge last week broke below a trendline originating from November last year. For some, that could suggest even lower prints lie ahead -- and hence more stock market gains.

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