Hot Off The Press, Here Is Gartman’s Nikkei “Target” In “Violently Plunging Yen” Terms

You asked for it, and here it is: Dennis Gartman’s take on the Great Nikkei “price target”

THE YEN HAS VIOLENTLY PLUNGED… VERY VIOLENTLY… and the Nikkei has soared, and they should given the “double barrel” announcements from the Bank of Japan and from the Japanese Government Pension Investment Fund with the former pledging to expand its balance sheet materially and with the latter finally give fuller guidance as to the expansion of investment in equities it shall allow for the nation’s pension funds.

… The Bank notes the better economic environs but it is far more concerned about the prospects of deflation and/or of dis-inflation and has moved aggressively to countermand those forces. Caution has been thrown to the winds in Japan and we shall applaud the Bank for taking this action.

It is not our duty to tell the monetary authorities what they should be doing for that is not our portfolio. Rather, our portfolio here is to be a mercantilist warrior on the battle field of investments, joining the fight on the side of the “team” that is winning and whose “weaponry” is both the best, the largest and the most prone to being used. Our portfolio is to be agnostic; to watch for changes and to act accordingly to those changes. Hence if the monetary authorities intend to act expansively, it is folly on our part to take the other side of their trade for their “margin accounts” are far, far larger than is ours. If the Bank of Japan is going to expand its reserves and if the guardians of the pension funds there are doing to toss caution to the wind then so too should we.

* * *

THE NIKKEI: BLAST OFF!: It shall be very, very hard to do, but the Nikkei is only now just breaking out to the upside and so we should buy it while selling the Yen at the same time. The “hard trade” is always the best trade and it is going to be very hard to buy this market but we have to with 24-25 thousand as a target.