Gartman does it again.
Yesterday we reproted that with futures spiking, and the S&P set to open just shy of 2,600, Gartman panicked, and closed out his shorts, instead predicting a “violent, parabolic” move higher.:
We have been wrong… badly… in taking even a modestly bearish view of the global equity market and effecting that bearish view via a position in out-of-the-money puts on the US equity market bought a week and one half ago. Fortunately we effected that bearish view with puts rather than with direct short positions in equites and/or via short position in the futures themselves, so the damage wrought has been minor. But the real damage is that we are not long of equities as obviously we should have been. Our position has to be covered and covered it shall be, for we fear that we are about to enter that violent… and ending… rush to the upside that has ended so many great bull markets of the past. At this point, the buying becomes manic and prices head skyward. Speculation is the order of the day, not investment and when such periods have erupted in the past prices have gone parabolic until such time as the last bears have been brought to heel and the public has thrown investment caution to the wind. We’re there now; this may become wild.
Whether Gartman’s bullish reversal was the catalyst for yesterday’s market weakness is debatable, however, one day later, with the modest selling persisting, here is Gartman again, and one day after Gartman closed his equity short, in anticipation of a “violent, manic” surge higher in the market, here he is again, explaining that he’ll “not hesitate even for a moment but to return to the short side of the equity market in US terms and perhaps even
broadly in global terms if the reversals in the DAX hold through Friday’s close.” To wit:
Having covered our small short position in the US market we had had via a position in slightly-out-of-the-money puts, we’ll not hesitate even for a moment but to return to the short side of the equity market in US terms and perhaps even broadly in global terms if the reversals in the DAX hold through Friday’s close. This is the hardest thing any investor/trader/analyst must be able to do: to acknowledge having been wrong for a short while only to see the market vindicate the initial position and thus to be forced to return to the original trade at a less advantageous price. We face that possibility even as we write.
And so, with condolences to the bears, it appears that yesterday downward pair trade set up, is now over.
via http://ift.tt/2AkFccZ Tyler Durden