Stocks Rebound As Gartman Turns Bearish

For a second, it seemed that the broad risk-off wave that started in Asia, swept Europe and pressured US futures was here to stay. And then, the signal all algos had been waiting for emerged: Gartman just flip-flopped back to bearish.

From Gartman's latest letter:

STOCK PRICES ARE DOWN AND THEY ARE DOWN SHARPLY…. EVERYWHERE and it is the fact that they are down in all ten of the markets comprising our International Index that has our very real… very keen… very severe interest this morning. Universality of weakness is rare and when it happens it almost always marks major turning points. We can recall the days just after the lows made in the spring of ’09 when after the material weakness of that violent bear market that suddenly all ten markets turned for the better. The low was marked by that universality of strength. We can recall one or two days late in the Dot.com bull run when the markets turned lower, marked by one or perhaps two sessions of sudden universal weakness, marking the top. The top is once again being marked as we write.

 

Secondly, here in the US, something strange had begun to change in the past week or so as the markets were opening higher and closing lower, or in some instances, were closing hard upon the very lows of the day. Bull markets open lower and close higher; bearish markets open higher and close lower and it was the latter that has had our interest. Yesterday was precisely that sort of trading affair as the market opened for the better and closed hard… very hard… upon the low of the day. The top was being marked.

 

Thirdly, the stocks that had led the bullish charge in the past year or more… the FANGS primarily, along with the likes of Tesla… were, over the past several weeks, turning lower, or in battle terms, the Generals were being shot, leaving the lesser ranks behind the battle, confused… sullen… and routed.

 

Finally regarding the European equity markets, is it not interesting how badly they’ve acted even as US equities in the case of the Dow had risen? Note the chart this page and note firstly how far below the highs made very late in October and very early in November we are presently? Secondly, note that as the market broke hard earlier this week the volume of the futures soared, while as the market there has bounced over the course of the past two sessions the volume waned… badly. If volume is supposed to follow the trend, the trend in the past several days has turned badly for the worse.

 

In our retirement funds here at TGL the only thing we’ve done is to have added a bit to our out-of-the-money put position; we’ve left our long position in steel shares alone and we’ve left our long position in fracking related shares alone also. We did reduce our long position in gold however. This morning, we’ll be buying more puts and we’ll likely be reducing our long positions sufficiently to get our “net” position to one that is slightly net short.

And now, market are back in the green.

Comments

ParkAveFlasher Wed, 12/06/2017 - 09:57 Permalink

Nuclear annihilation?  LA inferno?  Communist takeover of Western hemisphere?  Brexit tremors?  Chinese implosion?  BitCoin hyberbola? No problem.  Gartman is bearish, thus keep calm and just btfnalaictowhbtcibtch 

Expat DC Beastie Boy Wed, 12/06/2017 - 10:34 Permalink

That is the right question.  So many idiots here gleefully revel in the Gartman headlines and call him an idiot or a contrarian indicator.  Yet, he is still in the game and making money.  So that leads to some questions.Do the readers here and on similar sites have the faintest fucking clue what Gartman is even saying?Is Gartman sending out his views after he has executed his position changes...and back again?  I don't even know if this is illegal or not.I used Gartman's commodity analysis for many years and was impressed with his record and his predictions.  I cannot say anything about his stock views and analysis, but based on his commodities analysis, I have to say that there is something wrong with the way the many rabidly anti-Gartman sites like ZH and Mish treat him.  What did that guy do to piss off all you neo-nazis anyway?  Is it his jewish name?  Seriously?  As if any of the fuckheads who generally populate the commentary of ZH or Mish could even describe how a stock market works!

In reply to by DC Beastie Boy

rex-lacrymarum Expat Wed, 12/06/2017 - 18:50 Permalink

Flattery will get you nowhere.  With respect to the stock market, Gartman isn't just a run-of-the-mill "contrary indicator". He's perfection incarnate. The market will turn in the direction opposite to his call within seconds and at most minutes of it being published (i.e., as soon as it becomes known to a wider public) - and it happens literally every time. In fact, this well-documented Gartmann effect is positively eerie. And you can stick your neo-nazi dig to where the sun don't shine. Yes, these people do abuse the free speech policy of some sites, including ZH, but they certainly don't care about trading or Gartmann's astonishing record as the anti-Zoltar of the stock market. 

In reply to by Expat

nmewn Wed, 12/06/2017 - 10:12 Permalink

STOP! DO NOT SELL ALL THE THINGY THINGS!!! CLOSE LONG POSITIONS ON VENEZUELAN PETROBITZ!!!IT WAS A TRAP!lol...sorry bout that, hope you didn't lose much  ;-)

Richard640 Wed, 12/06/2017 - 10:30 Permalink

AT MARKET TOPS BULLISH ARGUMENTS ARE IRREFUTABLE----THEIR LOGIC IS "IRON CLADWERE THIS 2010--THE cavaier pooh-poohing of  market cassandras would be appropriatebut this late in the game, the WOLF just may be at the door--there were plenty of bearish forecasts in 2006-7, and they finally turned out to be right--investors intelligence had HIGH BEARISH READINGS JUST BEFORE THE CRASH...put that in youir pipe and smoke it.The end is nigh, brother, the end is nigh! World markets are like a pie crust stretched across the roof of a volcano!Fu Manchu is about to pull the lever to the trap door!Warbucks signals the trusty  Punjab to cut the cords of the rope bridge!Grease the skids! Happy tobogganing!

jago Wed, 12/06/2017 - 10:43 Permalink

" Bull markets open lower and close higher; bearish markets open higher and close lower "this is a legit observation..whether we are in still in one or entering the other remains to be seen.

MrBoompi Wed, 12/06/2017 - 11:03 Permalink

It's all about timing.  I'm sure he is going to inform his paying clients before releasing public "predictions".  He is hooked in to the Federal Reserve since he did teach some classes for them, and has held many positions in futures businesses.  But around here Gartman is a meme for making money by doing the exact opposite of what somebody says to do.  If you are a paying client of his, you know more about him than we do.  

rex-lacrymarum Wed, 12/06/2017 - 18:40 Permalink

Obviously, no-one can possibly call this a coincidence anymore. The man is a sorcerer. In Saudi Arabia they would already have beheaded him in the public square.