There was some confusion why the S&P 500 just had to close in the green yesterday. The answer was simple: as we reported first thing yesterday morning just two days after “world renowned” CNBC contributor Dennis Gartman said he was “covering shorts” because he was “stunningly, shockingly, stupidly wrong” he flopped and was reducing his longs. Ergo, green close. It also meant that there was virtually unlimited upside before the market. We are, however, delighted to announce that just one day after being spooked on the bearish side, the Gartman Letter author is now back to “very, very marginally net long of equities in our retirement fund here at TGL.”
This coming from the gentleman who yesterday said that “we are obviously not about to change our position here, having been long of gold in EUR and Yen denominated terms for years in the case of the later and for nearly a year in the case of the former, putting to bed, we hope, the reports amongst the blogs that we change our tune rather often. Clearly we do not.”
If you are not smiling yet, you will be after this brief recap of Gartman’s most recent virtual retirement money “calls”:
Friday, February 26: Gartman covers his shorts, turns bullish.
We have been short one unit of equities in rather global terms, by being short one third of a unit of US equities; one third of a unit of the EUR STOXX 50 and one third of a unit of the Nikkei. The trade started off properly and almost immediately we were profitable; however we are now almost at a small loss on the trade… We wish to cover the position immediately upon receipt of this commentary, taking a very small profit and refraining from taking a loss and living to fight another day and in the end succeed.
Tuesday, March 1: Gartman is “selling the market short again.”
We are selling the markets short once again, having been short recently and having covered that short only a “short” while ago. But we are sellers once again this morning, noting that as the global markets have rallied they have done so on lesser volume on balance. Volume should follow the trend and the trend and volume are pointing lower, not higher.
Wednesday, March 2: Gartman says “we were stunningly, shockingly, stupidly wrong” as he covers shorts, goes long… again.
In our retirement funds here at TGL we moved swiftly to cover our short positions and we moved just as swiftly to buy what we could, when we could and where we could. We covered our derivatives positions and we urge everyone to do the same… immediately. We held on to our long positions in tanker stocks and we actually bought some of the oldest of the old guard dividend paying stocks mid-day just because the market was loudly telling us that we had no choice but to do so.
Monday, March 7: two days after “covering shorts”, Gartman is “reducing longs.”
At this point, it would be ill advised to suddenly turn bullish of equities but instead at this point it might even be rational and reasonable to consider reducing long positions and become more and more neutral of equities…. we are “short” of a small but important position in derivatives that has reduced our net long exposure to the markets to something only modestly long. Likely we shall be adding to our derivatives positions while reducing our long positions today in order to bring our “net” exposure to something far smaller than it is.
And finally today, March 8, he is “net long.”
We are ambivalent as to the direction of stock prices at this point, and our ambivalence is reflected in the fact that we are very, very marginally net long of equities in our retirement fund here at TGL, having made only the smallest of changes to our position.
He may be “net long”, but he is concerned and dismayed by the lack of volume: “The rally in equities continues to cause us concern if for”no other reason than the volume on the upside remains tepid at best. Note then the chart at the lower left of p.1 of the Dow Industrials upon which we’ve noted the general trend of volume traded with the volume rising as the market falls and with volume falling as the market rises. This we find disconcerting. Indeed this everyone should find disconcerting and we are dismayed that no one other than we find this problematic.”
The obligatory rhetorical question follows: “Characteristically in recent months, lower openings have”given way to stronger closes here in the US, but what if this time it’s different? What if this time the lower opening is followed by even greater weakness?”
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We bring all this up just in case there is any confusion if the market closes red today.
However, the worst news is that after Gartman ran away from gold some $30 lower less than a wee ago…
… we ran to cover our US dollar denominated gold position mid-day and we shall argue strongly that those still long of gold in US dollar terms, as noted above, should do the same.
… he has done what every other momo-chaser would do: he is about to go long again.
There is some formidable resistance to further strength in gold at the $1270-$1280 level, but what is impressive in our eyes is the fact that as gold in US dollar terms has consolidated at or just below that resistance, the support intra-day has been quietly, but consistently rising. A movement today at any time upward through $1275 would be technically impressive, and we shall keep a very close watch upon that level, intent upon adding to our positions should that take effect.
Wait, did he say “adding to our positions”? Would that be the positions he “ran to cover” on March 2? Of course, it goes without saying that anyone who wishes to close out their long gold position at this point, is excused.
via Zero Hedge http://ift.tt/21VRTah Tyler Durden