Gartman says gold is in a true bull market—and on its way to $1,500
by Stephanie Landsman
Source: CNBC.com
http://www.cnbc.com/2016/05/03/gartman- ... =103598073
Gartman also noted that stocks have already had an "outside reversal week … where you've made a new all-time high and then taken out the previous week's lows, already in a mere two-days period of time, those sorts of things have in the past been very indicative of important tops."
We have derivatives positions in place sufficient to keep our net market position to one that is somewhat net short.
We are also long, of course, of gold predicated in EURs and we have a very, very small position in “SPY” puts that are rather far-out-of-the-money at the moment as a bearish “punt.”
As for gold and the other precious metals they remain rather obviously weak and as we move away from Tuesday’s collapse it appears more and more that this was a forced liquidation on the part of a large… actually a massive… hedge fund out of London.
He is “calling for a major, multiyear top on the equity markets following the recent volatility and following the reversals to the downside that took place yesterday in the Dow Industrials; the Nasdaq; the S&P and the Russell 2000.”
Gartman wrote that stocks will suffer as monetary authorities slowly pull back on stimulus, and he’s concerned about a “violently random” trading environment in the past few months and reduced trading volumes.
“It is time to hold cash; it is time to sell rallies; it is time not to buy weakness,”
His pessimism derives from what he perceives to be the absence of fear among market participants.
The traders making the most money are those too young to remember the last bear market.
Which market is most undervalued now? Gartman says it’s commodities, especially agricultural commodities—which he says are “unbelievably inexpensive right now.”
The two agricultural commodities that he currently is recommending in his newsletter are cotton and wheat. ( iPath Series B Bloomberg Cotton Subindex Total Return (ticker: BAL), and Teucrium Wheat (WEAT)).
“The market will return to rationality the moment you have been rendered insolvent.”
I think over the course of next year, he or she who loses the least amount of money will be the winner.
Participants have turned their attention to elevated inflation and Fed Chair Jerome Powell’s hawkish tilt, prompting hedge funds to ditch equities at the fastest rate in 20 months.
Prices should go lower within the next year and the 10-year Treasury yield will rise to 2-3% over the next several years.
‘Get the trend right’ and I think that the trend is now to the down, not the upside.
Gartman recommends high-dividend stocks and to “avoid the high-tech stuff Cathie Wood et al. have been exposed to.
Stocks could face a “slow, laborious” decline in 2022 as a result of a more hawkish Federal Reserve that may raise interest rates four times.
Gartman has long been calling for a bear market.
The benchmark overnight rate could jump at least 100 basis points from current levels by the end of the year.
Gartman admitted he’s been wrong for the past six months to call for a bear market.
Going to the sidelines in a quiet and reasonable manner I think is the proper way to trade for the next year or two.
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