Price dipping below their 10-day moving average

The inflation print has come in worse than expected and the pre-markets are very weak. The markets will likely open down. The trending has been somewhat signaling that as well. The recent short-term bullishness that I covered couple of days back seems to be dissipating.

Major Markets

The trending table is showing the short-term weakness again.

We can see that the price for most of the major markets has dipped below their 10-day moving average. They were all green 2 days back. This could mean a trend reversal back to bearishness soon or it could be a temporary downtrend. My system will confirm if it is a downtrend when the 3rd column indicator (10-day over 20-day moving average) changes its color.

Major Sectors

Similar trend is seen in most of the major sectors as well.

Biotech (XBI) continues to remain strong. There were many more green cells in the 1st column indicator 2 days back. That has changed in sync with the major markets.

Market Volatility

The VIX - market volatility - remains high.

The 3-month high was 34.75 on May 9 and the low was 20.32 on April 20. This is indicating high anxiety in the markets. Stable markets are depicted by the VIX range within 15-20.

Conclusion

I have 25% capital deployed in the markets as of now based on the short-term bullish trend my system indicated. The markets are highly volatile and there does not seem to be any strong catalyst to calm the markets. The short-term bullishness could be a head fake. At the same time, markets are oversold and currently searching for a bottom. The S&P 500 had a recent low of 3666.77 on June 16. I will wait and watch for now.