Angry Gartman: "We Are Supposed To Believe The Bull Market Is Still Intact? Utter And Complete Nonsense"

"World-renowned" commodity guru Dennis Gartman has published his first Gartman letter note for 2019, and not only is he more bearish than at any time in recent year, he is also angry. Very angry, specifically at the stupidity of "television business channels" which have "all touted the fact that the market’s rally last week came just as stocks here in the US as measured by the S&P had not fallen below the -20% point and thus had “Not yet entered bear market territory.” What sort of nonsense was and is that?"

There is much more in the must-read rant excerpted below:

STOCKS HAVE BEGUN THE YEAR ON A HORRIBLE NOTE, as Asian shares and particularly Chinese shares have fallen sharply on the news that the Chinese purchasing manager’s report has fallen below 50 indicating that the economy in China is in recession already and thus dragging the Australian and New Zealand markets lower. US stock index futures opened sharply higher with the Dow futures having traced 150-200 “points” higher in early trade and with the S&P futures having traded 15-20 “handles” higher earlier today. The Dow futures are now nearly 300 lower than Monday’s close, or nearly 500 below the earlier highs, while the S&P futures are 25 “handles” below Monday’s close or approximately 45 “handles” below their earlier highs.

This is terribly dismaying for the first day or the year and the first day of most months see large inflows of money into the US markets for pension fund and 401k purposes, with the stock index futures rising in anticipation of those inflows.

Since the year has only just begun it is futile… and perhaps utterly stupid… to note the change for the year-to-date; indeed, we’ll not mark that change until this coming Monday when we’ve had three days of market movement to take into consideration. However, marking prices from their highs made in late January, stocks in global terms as measured by our Index are down 2,083 “points” or -16.2%.

As we have explained time and time again over the course of the past several months, we believe that 7% from any interim high is what we have referred to here as the “Maginot Line” between a mere correction and a real bear market, just as a 7% increase from any interim low is the line separating a correction and a new bull market [Ed. Note: For the historically and geographically “challenged” among our readers, the Maginot Line was the fortification line constructed by France in the 30’s, the intent of which was to repel any future German army attack upon France’s eastern borders and/or to force German troops northward first into Luxembourg and Belgium. It was supposed to have been impregnable. However, it proved almost wholly without merit, but we’ve included a map of the Line this page with the “strong” fortifications along the direct French/German border and with the lesser fortifications along the Luxembourg/Belgium/France boundaries.]. Thus, at nearly -16% from the January highs we think it is very clear that bearish forces are in control and if it is not clear it is becoming so after the Year’s turn.

To this end, we have found it almost comical how the television business channels have all touted the fact that the market’s rally last week came just as stocks here in the US as measured by the S&P had not fallen below the -20% point and thus had “Not yet entered bear market territory.” What sort of nonsense was and is that? The S&P had fallen -19.7% and stopped for a day or two or three, and we were then supposed to believe that the bull market was still intact?! Nonsense…utter and complete nonesense.

We were on FOX Business Monday and were asked our opinion if the recent lows were going to hold and if it as permissible to buy stocks for the long term. We answered unequivocally “NO.” We may have hoped for and even expected the bounce to continue for a very short while, but we made it very clear that the bounce was to be ephemeral in nature. Certainly it is proving so now.

Further we note that the CNN Fear & Greed Index rose on Friday, but was unchanged following Monday’s strength, and is at 12.  CNN’s Index had been single digits for more than a month, rivalling that which had happened last spring as stock prices fell from their highs in late January. Because of the severely extended nature of this Index we have not recommend being short of equities for as we’ve said here since late two weeks ago, “A massive, short covering rally of some real consequence can and will develop at the proverbial moment’s notice.” One had but has proven truly ephemeral and hence we are neutral of shares as we hold cash. Eventually… we hope… the CNN Fear & Greed Index will make its way toward 60 or 70 and we’ll become manifestly bearish. We’ll move bearishly… then… and we’ve the very luxury of being patient but in being patient have we missed our opportunity? That is indeed the question?

The news regarding President’s XI and Trump should have been sufficient to keep the bounce in place for a bit longer. The problem was and is that this news should have sent the market on Monday soaring higher… 500-700 Dow points higher perhaps. It did not. The best that happened was the Dow traded 250 points or so higher. This we found lacking; today’s weakness makes that “lacking” lack even worse.