Excerpted from today's World-Renowned Gartman Letter,
SHARE PRICES HAVE FLOWN SKYWARD as our International Index has gained triple digits… precisely 100 points… for one of the very few times in its history, or 1.1% and it would have been higher still had it not been for holidays in Germany and China which have left their DAX and the Shanghai indices unchanged from the levels prevailing Friday. As evidenced by the chart of the S&P at the upper left of p.1, the support we had hoped would hold late last week had indeed held; the well-defined upward sloping trend channel continues to remain fully intact and until that trend line is broken we have to once again err upon the side of being bullish of shares generally. It is that simple and to make it more complex than that shall make it difficult to keep one’s focus.
Oh, there are indeed any and all sorts of fundamental reasons why the stock market in general terms is given over to being over-extended to the upside, including P/e ratios that are high; including earnings that may prove faulty; including high levels of margin debt; including far, far too many IPO’s that we think are ill-advised and overpriced; including the end of QE here in the US and of course including the horrible geo-political storms brewing seemingly ceaselessly… but yet support levels have held and trends from the lower left to the upper right obtain. One may wish to join the bearish camp, but one would be wrong.
...Prices are headed higher and we’ve no choice but to reduce our exposure on the short side via derivatives that shall therefore increase our long exposure.
And then this happened...