"We turned openly, but moderately, bearish of shares late last week and for a day or two we appeared to have been wise in our decision. Clearly that wisdom has waned rather materially in the course of the last two trading sessions and following the Fed’s non-decision yesterday we found ourselves covering in the calls we had written against our “tanker” shares as well as covering in some of the derivatives we had had in place, thus taking our net position in our retirement funds from one that was modestly net bearish to one that is nearly net market neutral."
Guess who just went "marginally net short... in dollar terms."
With Greece disintegrating before our very eyes, here are some recent blasts from the recent and not so recent past, showing just how clueless some of the most and least respected, strategists, bureucrats, drama majors, and former Goldman employees have been when it comes to Greece.
One (perhaps the only) bright spot in the past few year’s gold market has been Chinese and Indian demand for the metal. But physical bullion is only part of the story, and may not be the biggest one going forward. Speculation has been circulating for years that China’s miners, flush with cash from selling their low-cost output to the government, would soon start buying up the world’s in-ground gold reserves... and now, finally, the China-buying-all-the-gold-mines scenario has begun to solidify.
"We shall do our best then to remain as we have been: pleasantly long of equities on balance. There really is no other course of actions we can take.... Long of One Unit of Ten Year Notes/short of One Unit of the Long bond future: Friday, May 22nd we wished to sell into the strength of the bond market"
"We were sellers Monday, May 4th of the Russell and we were buyers of the S&P, for the chart of the former is ominously bearish while the chart of the latter is interestingly bullish. We’ve done equal dollar sums on both sides of the trade and for now we’ll not wish to see the trade more 2% against us. As we wrote the June Russell 2000 was trading 1222 and the June S&P was trading 2099.50. This morning they are 1253.50 and 2119.50 respectively, so we are now behind by 2.6% on the Russell and are ahead by 1.0% on the S&P. For now we shall sit tight but we are swiftly approaching our stop point, which is a 2% loss."
Remember MacNeil Curry, aka the second coming of Tom Stolper (even if he has a way to go to catch up to Dennis Gartman), aka the FX gift that keeps on giving? Well, he just gave another FX gift.
Last Thursday, when the market seemed on the verge of breaking lower, we asked if Gartman gave the all clear to go right back into stocks with his assessment that "1890 On The S&P Shall Be Our Target." As expected, stocks soared. It is now time to cancel the all clear: "As we have maintained since early last week, we’ve been neutral of stocks and we’ve now been wrong. When we are wrong we admit it and we were wrong to move from merely “pleasantly” long to neutral. Our first step is then to become modestly long, and we shall."
"A 10% correction from the high projects to 1890 on the S&P. Those shall be our targets to the downside and all the while we shall argue that the bull market is still in effect and that at the most severe we are to be neutral of shares until such time as those targets are high or until such time as there is a clear indication that the correction has run its course and has turned for the better."
"We are sellers this morning of the Russell and we are buyers of the S&P, for the chart of the former is ominously bearish while the chart of the latter is interestingly bullish."
Once again proving, "you get what you pay for," world-renowned Dennis Gartman unleashes his own brand of indecipherable nonsense advice to stock traders this morning...
Having written for several years about precious metals, the massive threat to our financial security (from our own financial institutions), and why gold and silver represent our best protection from that threat; it’s easy to forget that there are readers who are new to this sector. For those readers; it is necessary to review the fundamentals of supply and demand.
"Go long Russell 2000 vs. short S&P 500 via futures or total return swap – Russell 2000 futures have traded persistently cheap to fair value due to the high borrow rate on small-cap stocks, while S&P 500 futures have traded rich over the last 2 years as equity financing rates were driven higher by regulatory and industry changes. A long/short trade via futures allows the investor to collect this financing spread, and thus would be expected to yield a positive carry in addition to any outperformance (this carry was ~90bps annualized over the last year based on average futures roll costs). A swap-based implementation of this trade would similarly provide a positive carry, while eliminating dividend and futures roll risk."
"... we would, under most circumstances, “see” this unanimous direction of all ten markets to the upside to be a harbinger of a bearish move… the harbinger of the end of the current bull market; but… and this is perhaps the very biggest of “buts”…this time may be different… maybe. This time the markets seem to want to levitate skyward and thus far any attempts to “call” the top and positions ourselves in anticipation of a downward price correction have proven futile and badly wrong."
"The S&P: This has the ominous look of what some of the Old Guard amongst the market technicians used to call “Three Peaks and a Domed House” pattern, which always gave way to substantive weakness. All we know is that Friday’s action was horrific and that the volume swells on the downside these days, and wanes on rallies!"
- Dennis Gartman