This Rally Might Still Have a Chance

This rally almost fizzled. Today's Dow drop brought it under Nov 20 low and under 50 days moving average. Things aren't looking good. But one critical level is holding: Dow is still over 13 days moving average.

It still doesn't look good. I was looking at 1932, and July 1932 rally was running over 13 days MA for more than 2 months, crossing on the way over 50 days and 200 days moving averages. Now Dow is under 50 days MA and long way under 200 days MA.

But there is still hope while 13 days MA isn't broken. Tomorrow is a critical day. If Dow manages to stay over 13 days MA, rally still might have legs. If it closes under, the rally is over.

I am not happy with this rally. It looks pretty much like typical bear market rally. But one thing was giving me some hope: sentiment was and still is extremely bearish.

Gold looking bearish. GLD closed under 50 days moving average today, and that's after picture perfect head and shoulder formation. If GLD closes under 50 days MA tomorrow, it might be good time to short.

Full disclosure: at the time of publication author did not have positions in GLD. Positions can change any time.