Gartman: "The Nasdaq One Day Will Collapse... But Buying Today On Weakness Should Be Wise"

Tyler Durden's picture

As "expert" opinions on Friday's tech meltdown pile on, here is perhaps the most actionable: that of "world renowned commodities guru" Dennis Gartman.

THE NASDAQ’S ONE DAY COLLAPSE: Will The Trend Line Hold?:

 

Friday’s low was right along this trend line… which if we had space, could be extended well back into ’16. If this is still a bull market… and until proven otherwise it is… then buying the NASDAQ on weakness today should be wise and we shall.

 

 

 

Turning to the so-called FANG stocks… Facebook; Apple, Netflix and Google…and including the likes of NVidia and Microsoft… all collapsed on Friday if by collapse we mean breaks of > 2.0% and which in some instances was > 3.0% and which had traced out massive daily and even weekly reversals to the downside as new all-time highs were made early in the trading session followed by movements well below  the previous day’s lows. Google did in fact trace out a weekly reversal to the downside in perfect textbook fashion; so too Facebook and so also Netflix. Apple failed to trace out a text-book weekly reversal, but only because it did not make a new all-time high last week, having made its all-time high earlier in May. NVidia, one of the highest of the high flying stocks, did not trace out a weekly reversal to the downside, but did, however, trace out a textbook daily reversal.

 

Further, all of these reversals came on massive volumes. For example, NVidia, which has tended to trade 35-50 million shares daily traded over 100 million on Friday. Netflix, which has tended to trade 5-7 million shares/day, on Friday traded 10.3 million shares. Facebook, which has tended to average 15-20 million shares, on Friday traded 35.6 million and Apple, which has tended to trade 25 million shares/day on Friday traded 64.8 million.

 

We have included the chart of the NASDAQ at the lower left of p.1 this morning, noting that the lows on Friday amidst sheer panic selling in the early afternoon took the Index to a trend line that we extend back to the lows of last July, although we show it only into the lows of mid-April of this year. It shall take courage on our part to believe that the bull market is still intact, but in fact it is. Thus, if the NASDAQ were to fall back toward 5675 or so today we shall have to be a buyer, for as Old Turkey would remind us, “After all, this is a bull market.” Further, a drop to 5675 shall only be a 3.8% correction from the peak.

 

Finally, if the NASDAQ does test those lows, our urge shall be to own banking shares above all else for the banks did amazingly well on Friday, rising smartly even as the FANGSs were collapsing, predicated upon the Fed moving to tighten monetary policy at its meeting this week and thus widening net-interest income for the banks… the real driver of bank earnings. Regional banks, especially, may be best served, with the ETF soaring 3.1% on Friday and breaking out to the upside. Any periods of weakness this week are to be bought.

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pitchforksanonymous's picture

Uh oh. Market CRASH imminent!!!

CPL's picture

The running theory is when he manages to guess right it won't matter which direction the market is heading.

VD's picture

so what's Gartman's BTFD entry point again? oh wait, he doesn't even trade...

 

but he's like clockwork and catalyst -- today may just mark the start of the biggest bubble crash in history of "markets" as Gartman furiously yet cautiously yet pleasantly keeps catching falling daggers, virtually that is.

open calender's picture

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jcaz's picture

Sweet.   Bot puts Fri and today across the board, and this is all I need to assure that I make money.

Thanks again, Dennis- seriously- you've made me and my clients a lot of money with your calls-  you've been the greatest contrarian indicator I've seen in 31 years in the business-  there isn't even a close second......

USisCorrupt's picture

When Gartman says Buy YOU BEST RUN AS FAST AS YOU POSSIBLY CAN !

GUS100CORRINA's picture

Gartman: "The Nasdaq One Day Will Collapse... But Buying Today On Weakness Should Be Wise"

My response: ROFL!!!!! Let's examine some facts:

FACT #1: APPLE Earnings have been flat since 2014.

FACT #2: Margin Debt is at a new all time high!

FACT #3: HUGE P/E Margin Expansion for NO GOOD REASON

FACT #4: CBs like SNB are buy TECH STOCKS like APPLE with FIAT Currency.

FACT #5: AMAZON Market Cap vs Walmart is a JOKE!!!! (See Comparison below)

WALMART

Index DJIA S&P500 P/E 17.2

Market Cap 226.55B Forward P/E 16.6

Income 13.64B PEG 3.42

Sales 485.87B P/S 0.47

Book/sh 25.47 P/B 2.96

Cash/sh 2.2 P/C 34.31

Dividend 2.04 P/FCF 15.42

Dividend % 2.70% Quick Ratio 0.2

Employees 2300000 Current Ratio 0.9

Optionable Yes Debt/Eq 0.59

Shortable Yes LT Debt/Eq 0.54

Recom 2.7 SMA20 3.08%

AMAZON

Index S&P 500 P/E 187.5

Market Cap 437.54B Forward P/E 73.87

Income 2.37B PEG 6.48

Sales 135.99B P/S 3.22

Book/sh 40.43 P/B 22.72

Cash/sh 54.53 P/C 16.84

Dividend - P/FCF 45.08

Dividend % - Quick Ratio 0.8

Employees 341400 Current Ratio 1

Optionable Yes Debt/Eq 0.61

Shortable Yes LT Debt/Eq 0.4

Recom 1.8 SMA20 2.28%

 

 

Iconoclast421's picture

AMZN P/E is around 186 right now isnt it?? lol. Cheap!

VD's picture

excellent post. this truly says it all. AMZN is the TSLA of "retail" and is, though to lesser degree, also a corp welfare queen.

gatorengineer's picture

Wally isnt example a shining example of free market, where would they be without EBT / SNAP?

AMZN is playing the waiting game, until big box retail is completely dead.... then they jack up the prices....

The other thing is if AMZN were real what would fed ex and USPS numbers be doing?

VD's picture

which is why AMZN is positioning to accept EBT and subisidizing prime for welfare recipiants, bc you know, welfare recipients need their shit shipped same day....

VK's picture

Facts are irrelevant. BTFD until the CB's stop pumping in $300 Billion into markets globally each month.

gold rubeberg's picture

BTFD until there is no more D to B!

Kokulakai's picture

Buy the dip until the music stops?

Good luck finding a chair.

Erek's picture

"But Buying Today On Weakness Should Be Wise"

He didn't say if it is wise or not he only said "it should be".

Talk about middle-of-the-road! His next job should be tightrope walker at the circus.

With statements like this he should be put out to pasture. Why does ZH or anyone else publish this crud.

Oh..wait...entertainment

Drimble Wedge's picture

If Gartman just started 'shorting' his own recommendations using 100x leverage, he'd become a jizzilionaire instead of a jizzilionEE

 

Still time to turn it all around!

Catullus's picture

At some point the dice are going to come up 7-out,  but not this roll

GunnerySgtHartman's picture

The tube steak strikes again! ("strikes out" may be more accurate)

buzzsaw99's picture

so the nazcrack won't collapse but buying today would be a mistake. got it. thanks denny!

The Count's picture

Gartman being the very best (contrarian) indicator all I can do is prepare for the big meltdown!

Swamp Yankee's picture

Yes, yes doom.  Doom for everyone.

 

Beer?

Crypto-World-Order's picture

Nasdak 7k coming bitchez. BTW How about ETH? TO THE MOON my pretties.

chubbar's picture

I'm sure the banks will do brilliantly with an interest rate increase by the FED. Just ignore all the NPLs that start showing up on their doorstep as the economy goes from a stall to falling out of the sky.

Let it Go's picture

Toss a coin when it comes to Gartman's advice. Time has a way of revealing certain realities but does so at its own choosing. The economy is far from a well-oiled and designed machine and in the end, we may find that it is not really completely under the control of those who have been placed in the driver's seat.

In a world where central banks have become so deeply involved in manipulating and distorting markets we find true price discovery no longer exist. The question remains how best to prepare for a economic meltdown. Expect both luck and caution to play a big role on our individual fortunes as we move through the financially violent period before us. More on this subject below.

 http://brucewilds.blogspot.com/2017/05/catalyst-of-our-economic-demise-yet-to.html

The Count's picture

Just watch Uber. That pile of shit is self destructing as we speak. Best indicator the tech bubble is imploding.

Iconoclast421's picture

One could argue that the bottom of the trend line is about 5200.

me123me's picture

How anybody takes this guy seriously is beyond me. 

BandGap's picture

I love him for his unique form of comedy. He's a loveable loser.

DavidFL's picture

Perhaps Mr. Gartman should take a look at the futures before he makes a buy recommendation. Incredible how these guys stay employed, even more astonishing is why anyone listens!

The Count's picture

Just do the EXACT opposite of what he says and you will get rich.

zvzzt's picture

true story: had lots of discussions with my former employers (two major banks) about such 'experts'. At the end (took some months), the department head said: 'look, we don't care if they are right or wrong or if clients lose money, as long as clients trade on the advice they give. The advisers are just another marketing tool". 

 

dark fiber's picture

I stopped reading after commodities guru something.  This guy has consistently maintained a 180 degree phase lag between his positions and the oil market.

Wahooo's picture

Didn't everyone sell in May and go away?

issimo's picture

What kind of strategy says "...stay ready to buy now, but beware because there will be a total collapse soon!"  Once you have bought, do you sell once you are up 1% because disaster is right around the corner?  What do we even call a strategy like this...Investor's Russian Roulette...The Bungee Buy and Sell Blueprint for Stress...Gartman's Glorious Gambit?  If really thinks this market is done, why is he giving advice like this?

techpriest's picture

Someone bigger needs to sell, but in order to sell someone else has to buy. And Gartman's job is to find some buyers.

Harry Lightning's picture

What this clown wrote is very very scary. Get the parachutes out.

hibou-Owl's picture

How can this clown get media attention?????

silverer's picture

Gartman:
"I read it in the papers."

Lorca's Novena's picture

Gartman, youre an IDIOT.

That is all.

FreeNewEnergy's picture

This pissses me off because Gartman won't share any of his whacky weed. He's obviously keeping the best stuff for himself.

I call BOGART! BOGART, Bitchez!

mily's picture

8:30 straight line ramp up in full glory

Hongcha's picture

Yes.  I bought too much SQQQ on May 24 and watched my account bleed for 15 straight days until Friday.  Set a sell stop at 32 Friday afternoon and it filled this a.m. for a 1% net gain while I was making cornflakes.  At the nadr Friday pre-market I had been down ten times as much and the trade was spraying vomit.  The pain is over.

Lost in translation's picture

Seems a trader could do fairly well by listening to Gartman carefully, and then doing the exact opposite.