Yesterday, there was some confusion as algos and humans tried to explain to themselves why they are buying at such a furious pace that yesterday's torrid surge resulted in the biggest March 1 S&P500 surge in history. The truth is that there should be no confusion: as we previews, and explained, first thing yesterday, "Gartman Is Again "Selling The Markets Short" Just Two Days After Turning Bullish."
This, as we also said, followed a note just two days prior which we correctly forecast, put the "rally in jeopardy", when Gartman decided to turn long on Friday in the process halting the market's momentum, and leading to two days of declines.
And then, around 3pm yesterday, we reported the scariest rumor any bull could hear: Gartman was about to flop bullish again:
Rumor Gartman turning bullish again
— zerohedge (@zerohedge) March 1, 2016
Sure enough, it was true, and in such spectacular fashion that the following excerpt from his overnight commentary is nothing short of sheer poetry.
SHARE PRICES HAVE RISEN BY THEIR HISTORICAL MOST and we were stunningly, shockingly, stupidly, and utterly wrong in having sold the market short yesterday. We cannot ever have recalled making a singularly worse trade in our four decades of being involved in markets, but we stepped in the front of a reserve cutting freight train and the only thing to do when that happens is to run to the sidelines as soon as one can; admit one’s error and live to fight another day. We begin this morning then by saying without equivocation that we must needs cover the trade we put on yesterday having sold the US, the Japanese and the European stock markets short. What nonsense was that? How utterly wrong? How badly timed can a trade be?
In our retirement funds here at TGL we moved swiftly to cover our short positions and we moved just as swiftly to buy what we could, when we could and where we could. We covered our derivatives positions and we urge everyone to do the same… immediately. We held on to our long positions in tanker stocks and we actually bought some of the oldest of the old guard dividend paying stocks mid-day just because the market was loudly telling us that we had no choice but to do so.
There was a little something for everyone, including the gold bulls:
Further, as noted above, because we respect “reversals” in equities and commodities, the fact that the shares of the largest gold mining operation in North America opened higher and then closed lower upon the day, taking out and closing below the previous day’s lows… an “outside” reversal as they are known… we ran to cover our US dollar denominated gold position mid-day and we shall argue strongly that those still long of gold in US dollar terms, as noted above, should do the same.
Or the opposite, if they actually want to make money.
But the punchline is that despite being short into the biggest March 1 rally in history, and being long gold miners, his daily loss was just 1%. Recall from yesterday:
On balance we’ve done very little in the past few days and we are up a bit more than 10%... 10.3% to be precise…for the year-to-date.
And this is where he is today:
As of the close of trading last evening, we are up 9.3% for the year-to-date...
Ah, math. As for Gartman's latest reco, sorry bulls.