Just late last week, in his latest flip-flop on the market, Dennis Gartman once again turned bearish, warning that despite 2018 earnings rising at above 20% Y/Y, the trade war with China took precedence, and as a result "we fear that the great game of investment “musical chairs” may be ending; we fear that the “music” has stopped and we fear that everyone shall be dashing for that last available seat with injuries along the way."
Gartman also pointed out the sharp reversals in tech names as a reason for his latest bearish call:
The “reversals” to the downside we had noted last week are still extant; the “gaps” to the downside in the US markets former leaders such as Twitter, Facebook, Netflix, Tesla et al are open and ominous. Protection of capital is now the first order of the day.
As a result, Gartman forgot all about his Dow 30,000 call from mid-July, and predicted that unless the "virtual collapse in China can be isolated", a movement "below 2,775 in the S&P futures shall be a serious breach of technical support; a movement below 25,000 in the Dow futures would be the same and so too a movement below 7200 in the NASDAQ futures."
Fast forward just 2 trading days later when, drumroll, Gartman is once again bullish, writing in his latest letter that "any
antipathy we might have toward the US market has been, is now and shall apparently remain wholly ill-advised. We might be
dismayed and err bearishly of stocks in broad global terms, but it is ill-advised to effect that dismay or bearish erring by selling short the market here in the US for the economy here is strong and may well be the strongest of the industrialized world."
It also means that it is "better it is to adopt a bearish perspective by selling Europe or selling Asia but selling the US is and has been wrong. It is that simple, or at least it should be."
The punchline, as usual, is Gartman's update of his "retirement account" where all his shorts have now been covered:
"As for our retirement account, we made some material changes on Friday given that we were clearly wrong in being short of the US market as our “stops” are clearly going to be hit in our dual position short of US and European shares."
Coincidentally, the S&P is in the red to start the week.