Yesterday, when we commented on the bloodbath going on in the hedge fund space, someone asked if a hedge fund mauling is an indication of a market bottom. We replied no, and clarified as follows: "The bottom tick sign, if any, is that Gartman just went mega bearish..."
Yup: the infamous, and infallible, Gartman contrarian indicator had just struck again.
Ironically it was merely days earlier on April 1, when Gartman collected his daily $200 CNBC appearance fee, saying that "experience tells him to stay bullish on stocks", and that it's foolhardy to fret about the fundamentals of the economy adding that "Here, write this down: The stock market will stop when it stops, and not a moment before. It's moving from the lower left to the upper right," Gartman said. "Enjoy the ride!"
Fast forward to Monday when we got the following pearl:
In a reversal of his more bullish take on U.S. equities in recent weeks, Dennis Gartman said Monday that he's getting out of equities and sticking with cash and gold to ride out the recent pullback, which he called a "long-awaited and much-needed correction."
On CNBC's "Fast Money" on Monday, the editor of the Gartman Letter said simply, "I got scared."
Gartman said that Friday's action made it seem as though a switch was flipped in the minds of investors. "The whole world switched at that period of time," he said.
That same switch evidently dimmed Gartman's view of stocks as well; he pared down his exposure to equities from an average of 100 percent, to close to zero.
"You don't need to be short, but you don't need to be long at this point. I think cash is the right place to be," he said.
In Monday's issue of "The Gartman Letter," Gartman said he couldn't recall "a time in our history of trading when we've seen such unanimity of trend reversals" as was observed on Friday. "Indeed, the changes were material enough and important enough to mandate that action be taken to reduce our exposure to everything we have on, save for positions in gold," he said.
Ah, to have Gartman's magical VWAP algo that allows him to get out of all stocks into all cash in the span of hours. But then again one doesn't need VWAP or any other WAP when one "transacts" in monopoly money. Further, here was his commentary from his April 8 "Gartman letter":
STOCKS: The Trend’s Still Up But the Sidelines Seem the Better Place To Be: We’ve gone to the sidelines as the market “reversed” to the downside last Friday and seems intent upon tracing out a monthly reversal too, although it is far, far too early in the month to make that statement now and to give it great credence. But with the 100 and 200 day moving averages so far below us and with the market’s propensity to put the 100 day moving average to test we’ve taken to the sidelines… and we’re rather comfortable there… at least for now.
For those curious, here is the entire clip:
So what happened next? This:
Then again, none of this should be a surprise. Recall:
- Gartman Does It Again... Again
- Gartman Does It Again: "The Game Changed Utterly In The Capital Markets Yesterday"
- Gartman Comedy Hour
- Forbes Pulls Down China Hoax Story; Even As Dennis Gartman Is Completely Fooled
- Dennis Gartman Compare And Contrast
And so on.
We were wondering what we would do in the absence of Tom Stolper's impeccable genius of picking FX inflection points, we are, however, lucky to still have Dennis.
So this Bud's for you, real man of contrarian genius - we hope you remain as long of CNBC appearances (in $200 appearance fee terms) as is possible, sharing market inflection points with laserlike precision.
Luckily if Gartman is ever barred from appearing on CNBC, there is always a backup plan:
Further damage is being done as many support levels are being broken. Don't be complacent - this market has much more downside.
— Ralph Acampora CMT (@Ralph_Acampora) April 7, 2014