Two weeks ago, in our latest warning to shorts just after Gartman decided to short the market by going long the VIX (just ahead of its Yellen-inspired clobbering) we said we have "bad news for the bear: Gartman will be long the VIX until the S&P hits 2,118." This is what the regular CNBC Fast Money guest said:
Short One Unit of the US stock market via the VIX: Yesterday… Wednesday, March 17th… we “punted” on the short side of the equity market, but this time doing so by buying volatility; that is, we bought the VXX volatility index ETF listed on the NYSE upon the market’s opening. We’re giving this a rather wide birth and are willing to allow the equity market to move 5% against us before exiting the trade and that means a move by the S&P to and through 2118, but we intend to move that stop down sharply in the next day or two.
To which we said: "in other words, Gartman has basically doomed the market to soar back to its all time highs. Sorry bears."
The S&P just closed at fresh 2016 highs, and is about 70 points, o3 3%, away from all time highs. It likely will get back there very soon just as Q1 earning season is set to unveil a -8.5% drop in S&P500 EPS, the biggest plunge since the crisis.
This was probably confirmed by the latest overnight Gartman note, in which we had hoped that the newsletter writer would flopflop and go long, thus ending the rally. No such luck, in fact, Gartman continues to be short.
SHARE PRICES ARE SHARPLY HIGHER as 8 of the 10 markets comprising our International Index have risen… two, the markets in Hong Kong and Shanghai, having risen by more than 1%...and as one (the market in Japan) has fallen modestly while the stock market in the UK was unchanged. Volumes were light until Dr. Yellen had gotten mid-way through her presentation to the Economics Club of New York, but once everyone had read her prepared speech and had understood just how uncommonly accommodative it was stocks in the US moved sharply higher and closed hard upon the highs for the day.
At the day’s end, the CNN Fear & Greed Index closed up a bit for the day… at 68 compared to 64 the day previous… but it is still well down from the highs of one week ago today when it was 78. Anything above 75 is “extreme greed” and historically when this index moves upward past 75 and then turns lower the stock market suffers… often quite seriously. Too, the volume continues to rise as prices falter and to falter as prices rise. Further, as noted here yesterday at some rather great length, the “Commercial hedgers” have gone from a material “net long” position several weeks ago to a small net short position, while the “small traders” in the futures markets have gone from a rather large net short position to a rather small net long position instead. History is not kind to those who join the “small traders” over any reasonably protracted period of time. History, on the other hand, is kind indeed to those allied with the “commercial hedgers.”
To this end, we are still going to err bearishly of stocks and certainly we shall not err bullishly of them. We are, in our retirement account here at TGL long of gold in EUR and Yen related terms; we are long of a small position in the corn ETF and we are long of the bond market ETF, which tends to be a bearishly construed position. As of the close of trading yesterday we are +8.2% for the year-to-date, compared to the loss thus far this year of our International Index of 3.0% and compared to the small gain by the S&P of 0.5%... a gain that many shall tout as evidence of a great bull run. We shall not.
We shall expect another ~1% rise in the "market" today.