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Zen And The Art Of Trading Crude With Dennis Gartman

Tyler Durden's picture




 

He's funny cause he's... funny.

We are short of Brent while long of WTI, but the political situation over which we’ve no control has taken control of  this spread rendering our position intolerable and forcing us to run for cover upon receipt of this commentary. Not to do so would be trading foolishness of the first order

Because in all other situtations when Gartman "puts" on crude positions (with whose money?) which are always a function of geopolitics, he does so only when he has control over the "political situation"? Gotcha.

Incidentally, here are the "trades" Gartman has on:

  1. Long of Seven Units of Gold/short of Two Units of the Yen and Five of the EUR
  2. Long of Three Units of the Canadian dollar/short of Three Units of the EUR
  3. Long of Two Units of new crop Hard Red Winter wheat/short of two units of Soft Red Winter Wheat
  4. Long of the four units of “dollars” and one Unit of Sterling/short of five units of the Yen
  5. Long of One Unit of August WTI crude/short of One Unit of August Brent crude

No, really.

 

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Thu, 06/12/2014 - 11:59 | 4848745 Tao 4 the Show
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Was that "Trading Crude" or "Crude Trading"?

Or maybe, "Paying for Crude Trading Advice from Rude Dude"

Thu, 06/12/2014 - 12:00 | 4848755 Pool Shark
Pool Shark's picture

 

 

OMG!!!

Gartman is long Gold???!!!

SELL!!! SELL!!!  SELL!!!

 

Thu, 06/12/2014 - 12:03 | 4848767 chapaev's ghost
chapaev's ghost's picture

PAST RESULTS ARE NO GUARANTEE OF FUTURE PERFORMANCE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

Thu, 06/12/2014 - 14:42 | 4849597 shouldvekilledthem
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BTC gained about $200 since gartman said that it should be avoided and it's only used by criminals :)

Thu, 06/12/2014 - 11:32 | 4848607 PlusTic
PlusTic's picture

of course he was on the wrong side...this fukk is uncanny!

Thu, 06/12/2014 - 11:41 | 4848638 NoDebt
NoDebt's picture

A worthy replacement for Tom Stolper's recently vacated position as "the world's most wrong person".

Thu, 06/12/2014 - 11:57 | 4848728 aVileRat
aVileRat's picture

I suspect Dennis has the opposite problem of many traders: he has lost confidence in his own instincts and is simply tape chasing. The only problem is chasing the tape will lead to a negative alpha, shocking I know.

meh. Do you think an Archer joke about ISIS will go over well at OPEC ?

Kurdistan will likely break out, and carry higher. Qatar is the swing for my gut feel. But at this stage it's a RAND statistical exercise now in threat analysis.

 

 

Thu, 06/12/2014 - 11:32 | 4848616 LawsofPhysics
LawsofPhysics's picture

Hold on a second, I have a very important question.

Are we talking about paper crude or physical crude?

Thu, 06/12/2014 - 11:44 | 4848662 Yen Cross
Yen Cross's picture

  Definitely "paper" or he would be selling "calls"...

Thu, 06/12/2014 - 11:36 | 4848630 SHEEPFUKKER
SHEEPFUKKER's picture

Anybody have the YTD ROI on the short Gartman trade?

Thu, 06/12/2014 - 11:57 | 4848734 Pool Shark
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I'm waiting to invest in the new i-shares triple-short Gartman ETF.

 

Thu, 06/12/2014 - 12:15 | 4848818 Aknownymouse
Aknownymouse's picture

Tyler. I thought you wre going to launch that fund. Been waiting. I wanna get short of 10 units of Gartman in Tyler terms.

Thu, 06/12/2014 - 11:38 | 4848636 Yen Cross
Yen Cross's picture

    Gartman: "I am short lithium, while being long BiPolarness".

Thu, 06/12/2014 - 12:00 | 4848753 There is No Spoon
There is No Spoon's picture

did you mean "I am short of lithium, while being long of bipolarness"

Thu, 06/12/2014 - 12:05 | 4848780 Yen Cross
Yen Cross's picture

  You forgot (?)

Thu, 06/12/2014 - 11:38 | 4848637 buzzsaw99
buzzsaw99's picture

...while long of WTI

bless you my son, bless you!

Thu, 06/12/2014 - 11:40 | 4848642 Flakmeister
Flakmeister's picture

He is putting lie to the adage that a broken clock is correct twice a day....

Thu, 06/12/2014 - 11:40 | 4848644 Dr. Engali
Dr. Engali's picture

Wow I don't know who is worse, Fartman or Stolper.

Thu, 06/12/2014 - 11:49 | 4848691 Nathan American
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His newsletter is only $400 per month.......

Thu, 06/12/2014 - 11:52 | 4848699 1stepcloser
1stepcloser's picture

I'm short, the truth and long, ass fucking..  

Thu, 06/12/2014 - 11:52 | 4848700 Four chan
Four chan's picture

he speaks in units because he lost all his cash years ago.

just like the nigerian bros he never really trades just sellin them thar books .

Thu, 06/12/2014 - 11:54 | 4848714 VonManstein
VonManstein's picture

Gartman stories getting old like ZH has the best record.

Why doesnt tyler start posting some TRADES?? would be good for a laugh too

Thu, 06/12/2014 - 11:58 | 4848743 buzzsaw99
buzzsaw99's picture

did you even bother to read the disclaimer?

Thu, 06/12/2014 - 12:04 | 4848773 BlueStreet
BlueStreet's picture

You mean ZH's 'record' of speaking the truth?  Seems like the Tylers are batting .1000 in that department.

Thu, 06/12/2014 - 11:54 | 4848716 BlueStreet
BlueStreet's picture

Speaking of Zen, he talks like Wyland from Lost Horizon. One only has to speak that way when one has no fucking idea what one is saying. 

Thu, 06/12/2014 - 11:55 | 4848717 disabledvet
disabledvet's picture

Yeah, yeah "who needs oil at Zero Hedge when you have Peak Stupidy."

Total now has a 700K a day platform coming on line in Angola...with expectations of 2 million.

A DAY.

Stock price even popped on the news.

Of course natural gas is shooting higher today...as with Tesla, as with Solar City.

Too bad the USA has none of that.

Oh, wait...

Thu, 06/12/2014 - 12:06 | 4848783 Spungo
Spungo's picture

A broken clock is correct twice per day, but a perfectly functioning clock that is set 5 minutes fast is wrong 100% of the time.

Thu, 06/12/2014 - 12:07 | 4848786 TabakLover
TabakLover's picture

Mr. Gartman's "Golden Rules":

1. Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position... not ever, not never! Adding to losing positions is trading's carcinogen; it is trading's driving while intoxicated. It will lead to ruin. Count on it!

2. Trade Like a Wizened Mercenary Soldier: We must fight on the winning side, not on the side we may believe to be correct economically.

3. Mental Capital Trumps Real Capital: Capital comes in two types, mental and real, and the former is far more valuable than the latter. Holding losing positions costs measurable real capital, but it costs immeasurable mental capital.

4. This Is Not a Business of Buying Low and Selling High; it is, however, a business of buying high and selling higher. Strength tends to beget strength, and weakness, weakness.

5. In Bull Markets One Can Only Be Long or Neutral, and in Bear Markets, One Can Only Be Short or NeutralThis may seem self-evident; few understand it, however, and fewer still embrace it.

6. "Markets Can Remain Illogical Far Longer Than You or I Can Remain Solvent." -These are Keynes' words, and illogic does often reign, despite what the academics would have us believe.

7. Buy Markets That Show the Greatest Strength; Sell Markets That Show the Greatest Weakness: Metaphorically, when bearish, we need to throw rocks into the wettest paper sacks, for they break most easily. When bullish, we need to sail the strongest winds, for they carry the farthest.

8. Think Like a Fundamentalist; Trade Like a Simple Technician: The fundamentals may drive a market and we need to understand them, but if the chart is not bullish, why be bullish? Be bullish when the technicals and fundamentals, as you understand them, run in tandem.

9. Trading Runs in Cycles, Some Good, Most Bad: Trade large and aggressively when trading well; trade small and ever smaller when trading poorly. In "good times," even errors turn to profits; in "bad times," the most well-researched trade will go awry. This is the nature of trading; accept it and move on.

 

 

10. Keep Your Technical Systems Simple: Complicated systems breed confusion; simplicity breeds elegance. The great traders we've known have the simplest methods of trading. There is a correlation here!

11. In Trading/Investing, an Understanding of Mass Psychology Is Often More Important Than an Understanding of Economics: Simply put, "When they are cryin', you should be buyin'! And when they are yellin', you should be sellin'!"

12. Bear Market Corrections Are More Violent and Far Swifter Than Bull Market Corrections: Why they are is still a mystery to us, but they are; we accept it as fact and we move on.

13. There Is Never Just One Cockroach: The lesson of bad news on most stocks is that more shall follow... usually hard upon and always with detrimental effect upon price, until such time as panic prevails and the weakest hands finally exit their positions.

14. Be Patient with Winning Trades; Be Enormously Impatient with Losing Trades: The older we get, the more small losses we take each year... and our profits grow accordingly.

15. Do More of That Which Is Working and Less of That Which Is Not: This works in life as well as trading. Do the things that have been proven of merit. Add to winning trades; cut back or eliminate losing ones. If there is a "secret" to trading (and of life), this is it.

16. All Rules Are Meant to Be Broken.... but Only Very, Very infrequently. Genius comes in knowing how truly infrequently one can do so and still prosper.

 

As my Dad would say............. what a jack-ass-hole.

 

Thu, 06/12/2014 - 12:08 | 4848790 t0mmyBerg
t0mmyBerg's picture

Anyone who puts their ideas about the future out for all to see is going to be wrong.  Alot.  I do not see a problem with that.  Gartman does make an easy target for snarking and so he gets snarked here at ZH.  I do not have a problem with that.  But  Four chan talked about the fact that he trades units as meaning he has no cash.  What that really demonstrates is how very little Four chan understands about trading.  If you know anything about Richard Dennis (maybe you shoould look it up) or the Turtle experiment, or really any bet sizing system related to either gambling or trading you would know that one speaks in Units because different people will have different pools of capital and so you size your trades in units that scale relative to the size of your account or you can have them as units of risk if you prefer.  The money he trades is his own mostly in my understanding, so unlike Keith McCullogh, Gartman has skin in the game.

Tyler missed the really quirky and self-contradictory part of today;s Gartman Letter.  And that is that what he wrote right before the crude trade presented here.  Gartman wants to add to his long gold/short euro trade but is at a small loss and so cannot do so because his trading rules say to add to winners and never to losers.  A good rule.  But the long KE/short ZW trade is going against him yet he is adding to that trade today, so isn't that contradictory?  The reason I think it is not is that he is probably ahead on the wheat trade and so is not adding ot a loser but adding to a winner on a retracement, thus consistent with the rules..

 

Thu, 06/12/2014 - 13:00 | 4849066 TabakLover
TabakLover's picture

It ain't what Mr. Gartman says.  It's the pompous-ass, smug way he says it.

Thu, 06/12/2014 - 15:31 | 4849809 t0mmyBerg
t0mmyBerg's picture

point taken.  fair enough.

Thu, 06/12/2014 - 12:11 | 4848799 kurt
kurt's picture

I'm Long "Oh long Johnson" the talking cat.

Thu, 06/12/2014 - 12:18 | 4848831 MWizard
MWizard's picture

Learn the secret formula which in easy way will make you a perfect investor and trader;) https://www.youtube.com/watch?v=l85Ms85A0QQ 

Thu, 06/12/2014 - 12:31 | 4848893 ebworthen
ebworthen's picture

I bet Gartman and Krugman have lunch and talk about broken windows.

Thu, 06/12/2014 - 12:56 | 4849041 KnuckleDragger-X
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Bet on human greed and basic stupity, you'll win more often than not...

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