Over the last week, there has been little guidance from one of the market’s most steadfast directional beacons, Dennis Gartman. Luckily, he provided some much needed insight into what asset classes may not do in the coming days, targeting not one but two key products: oil, where we would “err bearishly” and bonds, which he is now shorting.
On oil:
CRUDE OIL PRICES HAVE RISEN AGAIN and we immediately draw everyone’s collective attention to the chart of nearby WTI crude oil at the bottom left of P.1, noting that crude on this rally of the past two weeks has made its way back into “The Box” marking the 50-62% retracement of the sharp bearish run that began in mid-June. Those bullish of crude would do well to pay heed to this “fact” and might wish to lighten up on their positions; those bearish might wish to take action. We, however, are recommending nothing at this point, although if pressed would tend to err bearishly… with the operative word here being “tend.”
On bonds:
NEW RECOMMENDATION: We shall try the short side of the long end of the US bond market, selling the Ten Year Note Future upon receipt of this commentary as it trades at or near to 132.00 in the September futures. Our stop shall be 133 ¼ for now; our target is 126 and we’ll add to the trade if 131 3/8’s is taken out to the downside today. We’ll begin with two units.
Finally, some big picture commentary:
Share price shave fallen back a bit after seven consecutive days to the upside, so a bit of correction is over-due and is certainly not unexpected. Nine of the ten markets that comprise our International Index have fallen with only the market in Hong Kong trading higher. However, none of the markets have moved by more than 1% in either direction as the summer doldrums have taken hold. Again, no one really should be surprised.
For the year-to-date, stocks around the world as measured by our Index are +5.4% while stocks here in the US as measured by the S&P are up 6.5%. We here at TGL are up a scant 3.7% for the year-to-date and the past two weeks have proven to be inordinately difficult, and for the first time in months we are under-performing both our own International Index and the S&P. We remain long of gold in EUR terms; long of the shares of the US largest aluminium miner and refiner (with 3/4s of that position hedged with a long position in puts that are now very nearly “in-the-money”) and short, as of yesterday afternoon, a small trial position in the long end of the US bond market
Take it over, headline-scanning algos.
via http://ift.tt/2bn5iU3 Tyler Durden