Having flip-flopped to bearish on Monday [4], just before a furious, 50 point S&P surge from the Sunday night lows, yesterday Dennis Gartman did what he does so very well, and once again changed his entire world outlook based on 1 trading day, and coupled with the shock that under central planning terrorism is now bullish, said that "we were clearly and obviously wrong, and when wrong the only possible action to take is to get less wrong; to cover that which had been done and to retreat to the sidelines. We did precisely that, covering in the short positions we had had in the derivatives markets... to end the day net neutral, or as close to net neutral as we could get ourselves."
That was our catalyst that not all may be well with the closing print, and sure enough, the S&P closed fractionally in the red.
Fast forward another 24 hours and here we are:
SHARE PRICES CONTINUE TO ADVANCE and they are doing so in the face of what happened last Friday evening in Paris, and they have done especially so in Europe as the DAX has risen by more than 2% since yesterday and so too the CAC in France, while the stock market in England has “lagged” behind, rising “only” nearly 2% but having failed to keep up with its continental brethren. We stand in abject awe and remain utterly and completely stunned by this show of patriotic fervor in Europe, but then again, the monetary authorities have no choice but to err expansionarily, have they? They’ve no choice but to expand the supply of reserves force fed into the system and until such time as those reserves can be taken up by the demands for plant, people and equipment they will find their way into equity investment.
Eventually this will end, and although some shall argue that this shall end badly, we note only that the trend remains upward and that no matter what is thrown at the markets these days they end higher. Those who have argued that this great experiment in monetary expansion shall end badly and shall end with increased inflation and rising gold prices while equities collapse have been proven utterly, completely and relentlessly wrong. We may not believe that this great experiment shall continue ad infinitum, but any time and every time we find ourselves philosophically dubious of what is going on and have attempted to take a bearish view our hands are slapped; our margins are depleted and our psyche struck down.
We’ve no choice then but to see in the “reversals” that took place on Monday the propensity still for the markets to head higher. Indeed, they may go parabolically so as the shorts run for cover and as those left behind rush to be included.
You know what to do. But the real punchline:
Finally we actually had several readers write to us yesterday to take us to task for insinuating that in light of our confusion regarding the upward explosion of stock prices following the terrible circumstances in Paris perhaps it would be best if even more such bombings and machine gunnings took place. We were stunned by these comments, wondering if these people had no notion of what irony is? Do we live in such a politically correct world that irony is now outlawed? Did they really, honestly believe that we were asking for more terror? Have we gone so far over the cliff of political correctness that this is what we have come to? To this end, we have no intention of apologizing. The thought is utterly alien."
One thing is certain: if anyone knows irony, it would be Dennis' clients.
