It has been a while since we checked in with our friend, momentum chaser extraordinaire Dennis Gartman, so with the S&P at 2,900, the Nasdaq at all time highs, and US traders blissfully ignoring the tempest that rages across the Emerging Markets, here is the punchline from the latest Gartman Letter:
STOCK PRICES HAVE DONE ONE OF THE RAREST OF THINGS: THEY HAVE FALLEN… UNIVERSALLY; that is, from the levels marked here yesterday, all ten of the markets incumbent in our International Index have fallen. This is a rarity and when it happens it often markets turning points in the markets generally; that is, after sustained bear markets when a day happens that all ten markets turn higher that has very often markets the very day or the week of the low, and when it has happened after long, sustained bull runs it has marked the day or the week of the high.
We are not prepared to say that of a sudden the bull market has ended, but we find it at least worthy of note that this rare circumstance is taking place at precisely the same time as the CNN Fear & Greed Index had made its way to 78… extreme “greed” territory… earlier this week and has turned lower. This, in the past, has also marked market peaks. Finally, an anecdote: the public is “in” the markets in manners not seen in years. We know this after listening to a local restrauteur tell us of his young son’s decision to “trade” stocks “to make a little extra money.” We were reminded of Joseph Kennedy’s admonition that the top was in the market in ’29 when the gentleman who shined his shoes began offering him stock tips!
It is far too early to suggest being short of equities, for we’ve tried that before and it proved unwise, but it is time for us to reiterate our admonition that one must absolutely refrain from adding to long positions. Even more certainly one must refrain from buying new positions!
Well, at least it’s not another “watershed” call for a multi-year top. So yes, more good news for the equity bulls. As for gold bulls, our condolences.
As for the precious metals, again we suggest that with each passing day we are more and more convinced that the panic lows of two weeks ago when spot gold traded down to $1160 were THE lows and are likely not to be revisited.
This just a few weeks ago after Gartman gave up on gold.