Gartman: "This May Be One Of The Most Important Days In The Future Of Equity Markets"

Tyler Durden's picture

Having staked his reputation one week ago that the "bull market has come to an end", the jury is still out on Dennis Gartman's latest forecast, although one thing is becoming clear - the period of record low volatility has come to an abrupt end and the question is whether it now reverts (much) higher, or resumes its drift lower on more vol-selling and expectations that central banks will keep it all under control.  And while we wait and see which way risk inflects, in his latest overnight note, the "world-renowned commodity guru" is out with an even more bombastic prognostication: "this may well be one of the most important
days in the future of the equity markets for a very long while" as it will either confirm or deny a rather unique technical pattern.

Below is the key excerpt from his latest, overnight note, with whose contents - we must admit - we largely agree:

STOCKS HAVE AGAIN FALLEN UNANIMOUSLY…AND MATERIALLY in global terms and what had heretofore been a rare circumstance when all ten markets incumbent in our International Index have fallen has now become commonplace for this happened one week ago today and it has happened yet again. Indeed, in the course of the past week, we’ve now seen three such “unanimous” days, for on Tuesday stocks “unanimously” rose. Such “unanimous” days had, until this week, been a truly rare event and had in the past marked major turning points in the market, marking final periods of exhaustion to the upside or to the down. It is interesting that with all of these violent price movements, stocks in global terms as measured by our Index have move barely at all, for last week our Index was 11,168 and this morning it is 11,226, or 0.5% higher.

 

We do not and we have not “trusted” equity valuations for quite some long while, believing that the markets individually and collectively have gone to levels that are not justified by earnings or economic fundamentals. The one fundamental that has been at work over the past several years has been the monetary expansions by the main monetary authorities: the Fed; the ECB and the Bank of Japan. Those authorities are now preparing to end their experiments with QE, and if they not prepared to end them they are at least prepared to slow down the seriousness of their expansions. This we find disconcerting.

 

Further, as has been the historic case, equity markets do indeed turn for the better long before economies move upward and out of recessions, always fueled by monetary expansion. Also, they turn down long before those same economies fall into recessions and indeed are usually moving lower as those economies are moving to their best levels as capital is demanded for plant and equipment. That capital must be taken from somewhere and that “somewhere” is the equity market… especially if the monetary authorities are becoming “stingy” with monetary expansion. That is where we are today; the economies are doing rather well… not exceedingly so; just nicely, pleasantly, “plowhorsedly” so… AND the monetary authorities are preparing to tighten policy.

 

Yesterday, and several times over the course of the past several weeks, we’ve written… comically, we trust… about the fact that all news, whether political or economic… has been accepted as being bullish news. As we said here yesterday, it matters not, in recent weeks, if earnings are better or worse, they’ve been bullish. If war is feared or if peace breaks out, it’s been bullish. If the fear is of inflation or deflation, those fears in either direction have been accepted as bullish of share prices. This we found almost comical in nature and this we found disconcerting. We have tried… unsuccessfully we shall admit…to err bearishly of equities even as “Old Turkey’s” admonition otherwise range in our ears and clouded our thoughts.

 

However, the fact that we’ve had three “unanimous” days in a week gives us very great… bearish… pause. The fact that corporate debt here in the US has risen to all-time highs gives us pause. The fact that corporate tax receipts have been moving lower, not higher, over the past many months gives us pause, for we’ve learned simply that corporations pay taxes only on “real profits” rather than upon some of the “engineered” profits they report to shareholders and to analysts alike. We are gravely concerned that the numbers of delinquent auto loans… loans that have been extended over the years from three years, to four and to five and six!... are high and are rising. We are concerned about the stunning levels of college/university debts weighing down upon our nation’s young voters who are swayed to the politics of the Left by demagogues who promise loan forgiveness and further free college; but most of all we are concerned that the “punch bowl” of monetary expansion is about to be taken away, or shall at the very least be threatened or slowed. 

 

Finally, we cannot help but note once again that recent conversations with the public about their “stock holdings” cause us very real concerns, for the public truly believes that in holding mutual funds and/or ETFs that they’ve little if any exposure to the vagaries of the stock market. We had that conversation last week with our “trainer” and friends in the business have written to us this week of the same conversations they’ve had with doctors, store clerks, plumbers, and teachers et al. The public is convinced that their holdings are insured against market risk and/or that they’ve no risk whatsoever. The public is wrong and therein is our greatest fear.

 

In our recommendations we are long of the “bluer” chip indices while we are short of the “higher tech/broader” indices instead; that is we are long of the S&P and we are short of the NASDAQ. The more aggressive among us might wish to be long of the Dow Industrials while short of the Russell 2000, but our positioning is that of an incipient bear market. For months, the tape has been “painted” as the broad market has  weakened even as the Dow has gone on to new highs. This will continue and those not involved in this manner should become involved today.

 

Finally, this may well be one of the most important days in the future of the equity markets for a very long while, for should the markets trade better and then close lower …and close hard upon their lows for the  week… it will be an ominous technical sign. The great Richard Dennis of past trading fame always taught his “students,” … the famed “Turtles” as they were called… to sell markets closing their weeks on multi-week lows. It was the singular rule that made him wealthy and it is a rule we always take very seriously to heart. Thus, we shall watch today’s action with much heightened interest… more perhaps than at any time in many, many months. the futures are trading higher as we write, but a lower close today shall not be pretty.

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VinceFostersGhost's picture

 

 

Alrighty then....

 

Having staked his reputation

 

How many times is that now?

Erek's picture

He has multiple reputations?

VinceFostersGhost's picture

 

 

Throw spaghetti at the wall......somethings bound to stick.

ParkAveFlasher's picture

He's actually telling us that today will be perfectly sideways.

 

The Cooler King's picture

If Gartman took 'both sides' of a coin flip, the coin would land on its side.

VinceFostersGhost's picture

 

 

Statistical probabilities be damned.

NoVa's picture

Maybe he is the broken clock that is finally right 2x a day = ?

 

The Cooler King's picture

Gartman's 'broken clock' is imbedded with a calendar function that's stuck on February 29th.

eclectic syncretist's picture

It is starting to look increasingly likely that an intermediate to long-term rotation out of soft assets and into hard assets may be about to begin and play out over the next year or more. If you have money in their game it's high time to be extra vigilant, for sure.

MillionDollarButter's picture

Gartman speak for "Today is a nothingburger!"  Taking the day off.

MillionDollarButter's picture

Really, get some javascript to keep people from double posting.  I thought I had missed the button the first time.

ChartRoom's picture

A blind squirrel still gathers a few nuts. That's how they say it in Dennis' backyard on the James.

Muddy1's picture

"for should the markets trade better and then close lower …and close hard upon their lows for the  week… it will be an ominous sign for thse who have shorted the markets"

GGGGGGGGGGOOOOOOOOOO LLLLLLLLLLOOOOOOOOOONNNNNNNNNNGGGGGGGGGG EVERYTHING!!!!!!!!!

Muddy1's picture

So Gartman has "staked his reputation" on his predictions.  That is why he still has a job.  He has NOT staked his ass on his predictions.  Had he staked his ass on his predictions he would have been unemployed long ago.

There are a very small number of people who visit this site who know, you NEVER, EVER, stake your ass on anything.

Give Me Some Truth's picture

He makes some good points about the bogus economy and all the real and valid economic indicators that are ignored or apparently don't count. Heck, he could be a poster on ZH.

A hobby of mine is making predictions. This piece deals with what will happen to the equity markets TODAY, and further calls this one of the most important days in a while.

I'm going to stick with "past behavior is the best indicator of future behavior." The stock market will go up. Or, at least, it won't go down. I'd be stunned if it falls significantly two days in a row.

Gartman probably has the answer to his query in the final sentence of his dispatch. He writes that it "won't be pretty" if markets tank again today. I'm betting that the Powers that Be who control said "market" do not like "ugly." They do not want anything to happen which would be widely interpreted as being "not pretty." If they can prevent such a scenario - and clearly they can - they will. Especially if this really is such a potentially pivotal day.

My prediction made, I do yield to his experience that if things  Do go south in a conspicous way today this might qualify as an ominous sign - maybe even a sign that something has (finally) changed in the stock markets. 

All it takes to have a good day in the stock market - or prevent a terrible day - is for enough people with deep pockets to make "buys," right? It just takes a few clicks on a computer keyboard to provide the "money" to make these buys, right? "Someone" will make said clicks. 

 

shizzledizzle's picture

Staked it right through the heart.

holgerdanske's picture

What value can technical analysis have in a rigged market?

The riggers will try and get the technical signals to do what they want, and they can do that for an extended period. Maybe even infinitely, if people are stupid enough.

But usually such schemes are only working for a while, and something spooks the investors, leaving the taxpayer to hold the can, - again.

 

Anyone participating in this circus richly deserves what they are about to be dished out.

JRobby's picture

It provides jobs for mathematics and statistics graduates.

Build a model off thousands of fictitious data points. Then trade on it.

Carry Pi out 100,000 decimal points. How round do you want it to be? How can any of it possibly matter? The real statistics are visible in plain sight.

Give Me Some Truth's picture

Si, what all of us see every day with our own eyes - and is probably happening to most people in their "own worlds" - is apparently not "tradeable" evidence. What we see with our own eyes and think must be truth is really not truth. The opposite of what we think is happening is what is really happening. 

Lesson: Trade (meaning buy) based on what you don't think is occuring in the world. 

ReturnOfDaMac's picture

Hi reputation as a contrarian indicator is spectacular!

jcaz's picture

Good God this dude pisses all over himself every time the Dow moves....

I really shouldn't bitch, tho-  I've made a living for the past two years doing the opposite of Gartman.

Thanks again, Dennis-  playing the bounce today, even tho my gut says to be short.....

overbet's picture

This dump feels different. Could finally be the one. Somethings got the mrkt spooked. Let's hope its DNC corruption coming to light and not the rumors Trump will resign.

 

Some liberal friends of mine who are traders are saying they are forcing Trump to resign on market tops so he can be credited with it. The sell of is them showing him they can dump it on him if he doesnt comply. 

Mon T's picture

They been saying that since Dow was 10,000

VinceFostersGhost's picture

 

 

rumors Trump will resign.

 

Heh heh.....oh sure.

ParkAveFlasher's picture

He's really just starting up.

This is a man who cut his teeth investing in NYC real estate when everyone else was running for the hills.

jcaz's picture

...No such thing as liberal friends who are traders, dude- nice try.

Ex-traders, maybe- fluffy boys don't last in this gig.

overbet's picture

Theyre on the family plan at prop shop in Austin. Started trading for a living in 2001, same as me, at a prop firm in Vegas. Brainwashed when moved to Austin I think. Loves Obama and wishes he was president for enternity. I have to block his text sometimes cause of the outrageous beliefs. Ban guns, ban hate speech. Tried getting through, but never could. 

 

People are more important than poltics and been friends more than a decade. Im not ready to give up yet. I like a good challenge. 

dark pools of soros's picture

unless he takes the red pill and gets woke he's mindfucked to oblivion like the rest of the democrats that havent jumped ship as Soros took over

Give Me Some Truth's picture

I don't know if you are right or wrong about there being no liberal traders. I do know, however, that liberal politicians get a ton of donations from traders and the Wall Street firms that employ them. These alleged free-market capitalists  don't seem to mind doing their part to help get lefties elected to office, liberals who presumbably will do everything they can to enact liberal policies.

 

Honest Sam's picture

The Minister of Fear orders you to appear at their offices in Compton.  Set aside several hours to take an I Q test. We pretty much know the results already, but we need documentation for support to have your thoughts about shit, shitcanned, before they get to contaminate the interwebnet. 

 

Mr Twitch's picture

"This dump feels different. "

DNC trying it w/o a diaper?

Mon T's picture

More Gartman and no results. Only analysts on ZH who predict market action is the SHEPWAVE

NotAnotherRally's picture

A few of us on here follow Shep. The calls this summer are too precise for an analyst. They know something.

Baronneke's picture

Good old Dennis must have been reading ZeroHedge a lot lately, as we know all this for quit a long time already.  

shizzledizzle's picture

Gold at 1300, silver at 17.15 and VIX at 15.... Gee, I wonder what's going to happen?! LOL! The only question is if the hammers are swinging out the gate this morning or if they wait till around 10:30. My guess is on the latter as they don't like to blow their load first thing in the morning but people could start selling and force their hand.

Give Me Some Truth's picture

You can chart it - some people do. On probably 75 percent (or more) days, silver and gold are knocked down - sometimes massively - at 9 a.m. EST. After the invariable bounce back up a little, another decline begins at about noon. It's like clockwork really.

I see that bells are ringing because the stock market had a decline yesterday of - what? - 1 percent? I follow silver daily. Intraday declines of 3 percent - judged from the Asian highs to the New York opening lows - are very common. It's also almost a sure thing that silver prices will plunge when London markets open at 4 a.m. EST. I'm not aware of any other market where such drastic and instantaneous declines occur on such a frequent basis. 

This said, I'm sure everything is on the up and up. I'm certainly not calling for the press, regulators, Justice Department or politicians to do anything as extreme as an investigation. 

ToSoft4Truth's picture

As the White American Mayors conceding power to the.... minorities, the market will fall. 

 

Go long fly strips.  That's what's coming.  Flies on our eyes.

yogibear's picture

Come on Dennis, commit to a buy or sell so we know which way the market isn't going!

 

Storm-Clouds's picture

Geez this Gartman looks familiar.

Oh! I know like one of the dead!

The dead don't care.....

But Gartman cares?

Cares about his tout sheet!

Sell signals?

Smoke signals?

Click bait?

Dead market?

The dead don't care....

Doug Eberhardt's picture

Why the f*** is gartman relevant?

 

CNBC puts him on air because why? Have you seen the returns of his GEUR and GYEN funds? Where is his GUSD fund? What? He doesn't have one? 

 

Fuck him.

TitsupBallyWho's picture

Today will be no change. How's that for a wrench in the Gartman plan.

Next week will probably bump a little higher. The following next two weeks will see a flash crash, and then the bull resumes until it doesn't.

Keep the change.

scoutshonor's picture

Damn, won't this man ever cease his blustering?  Just when the "markets" start to behave this chuckle-head has to start chunking monkey wrenches.

Gartman needs to take a break until the S&P hits 666.

ludwigvmises's picture

Didn't he stake his reputation on this bull market having topped last week?

Dumpster Elite's picture

Shows how much his reputation is worth.

buzzsaw99's picture

never go full gartman.

Jtrillian's picture

Analysts should only be promoted if they are mostly accurate.  This guy is worse than flipping a coin.  Waste of ZH space!!!