Dennis Gartman: Move To The Sidelines In Stocks by Lee Brodie
Last week he was bullish, but no more. Dennis Gartman says cash out.
“I liked stocks a week ago," says the strategic investor and CNBC Contributor, "but technical indicators are not to be ignored.â€
And there are plenty of signals that suggest the market is facing headwinds. This week the euro [EUR=X 1.2349 -0.001 (-0.08%) ]
broke below a key level against the US dollar [.DXY 83.18 0.13 (+0.16%) ]. A stronger dollar has been negative for the stock market.
Also, the
yield on the 10-year [US10YT=XX 1.564 0.006 (+0%) ] traded down to is lowest level in at least 60 years suggesting investors are willing to lose money – when adjusted for inflation expectations – because they’re so desperate for a safe haven.
In addition,
oil prices [CLCV1 86.43 -0.10 (-0.12%) ] have tumbled, which is good for prices at the pump but bad for energy stocks [XLE 63.63 -0.56 (-0.87%) ].
On top of that, the
CBOE Volatility index [VIX 24.06 -0.08 (-0.33%) ] jumped more than 12 percent, the biggest spike for the "fear index" since mid-April.
Plus, the S&P [.SPX 1310.33 -2.99 (-0.23%) ]
continues to hit resistance every time bulls try to drive it much above 1325.
And, as if all that’s not negative enough, Gartman is particularly troubled by the
action in the Dow Transports [.TRAN 5074.70 45.06 (+0.9%) ].
“They failed to make a new high even as the DJIA continued to rally,†he says. According to Dow Theory, the Transports confirm or deny moves in the Industrials. In this case, they're denied.
All told, “Get thee to a nunnery,†Gartman says. “It’s now safer on the sidelines.
http://www.cnbc.com/id/47617669
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