Update: Well, that didn't take long, because just over an hour into today's trade, the Nasdaq jumped to 7110, or up 1.52% on the day, beyond Gartman's 1.50% stop loss limit, thus stopping Gartman out.
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With Dennis Gartman refusing to commit to either the bullish or bearish case in recent days, algos have meandered listlessly, without direction, and so has the broader market. That is about to change because in his latest note, Gartman has a present to all those who delight in either trading alongside the "world-renowned commodity guru"... or against him:
But first, here are Gartman's comments on Facebook's blowout earnings:
Much shall today depend upon how the market responds to the strangely bullish earnings and sales figures reported last night by Facebook, from which we are to believe that the company’s problems with the exposure of personal data has had little if any effect. This is nonsense! Facebook users everywhere are using their “accounts” less frequently and advertising efforts are becoming fraught with problems. You know this; we know this; everyone knows this, but yet the figures released by the company tell us otherwise.
At any rate, FB’s shares rose sharply after the announcement, carrying the NASDAQ futures sharply higher with them. At this point, as we write, the NASDAQ futures are trading 28 “handles” higher, or a bit less than ½% higher and are running into resistance. However, they are doing so on truly negligible volume, continuing the process of volumes rising as prices fall and volumes falling as prices rise.
This is not how bull markets trade; it is, however, how bear markets do. Our strong propensity then is to be a seller into strength and especially so as the CNN Fear & Greed Index has risen over the course of the past two or three weeks from single digit “Fear” levels to the high 30’s-low 40’s, or back to “neutrality.” In bear markets, usually the best that markets can do is make their way from egregiously over-sold levels to neutrality. Rarely can they make their way toward truly over-bought circumstance.
Which brings us to Gartman's New Reco:
NEW RECOMMENDATION: We’ve been abundantly bearish of equities for the past several weeks, but we’ve failed to put that bearishness to test “officially” in a recommendation and so we shall do so this morning, wading in to sell the NASDAQ futures anywhere above $6560 as it trades $6564 as we write and finish TGL. We’ll risk 1.5% on the trade and we look for $6000 to be taken out to the downside sooner rather than later. Indeed, should 6400 be taken out today we’ll add to the position immediately
While there is a distinct chance that Garty may be correct, his last trade recommendation fiasco, in which his short oil trade was stopped out in less than 24 hours, suggests that he isn't, and instead the free money is to the upside.