Yesterday, when futures were at the lows somewhere below 2000 and just above the Fib 50 retracement, we said that "bulls may have one final trump card up their sleeve: Gartman is now actively adding to shorts."
On Friday we said that we were considering adding short hedges to our retirement funds in order to protect against the downside, but we failed to act; that is we did not make that an “official” recommendation and indeed we did not take any such action on our own. Clearly we should have. Clearly things were coming apart at the edges of the markets and clearly, in retrospect, we should have taken action. We’ll do so today on any minor intra-day strength that might evolve and as we write stock index futures are trading 12-13 “Big Figures” higher and that might serve as enough intra-day strength into which to sell.
A few hours later, the market closed at the highs. So, in a respite to bears, has Gartman done his usual 24 hour flip-flop? For the answer, look at futures which just hit their highs, perhaps in response to Gartman's continued bearishness:
THE S&P LOOK OMINOUS:… And It’s the Best of Breed: The market is “bouncing” a bit this morning but the volume is coming in on the downside and yesterday’s rally was on terrible “internals” as the number of stocks falling dwarfed the number rising!
SHARE PRICES HAVE FALLEN FOR YET ANOTHER DAY, as seven of the ten markets comprising our International Index have fallen while only three have risen and of the seven that have fallen five have fallen by more than 1% with the European markets leading the way lower. For the year-to-date, stocks in global terms are now down 512 “points” on our Index or 5.2%, while stocks here in the US are down a much less severe but still nonetheless important 1.8%. Interestingly, stocks in “Asia” have tended to lead the way lower for most of the year, with the market Sydney down 9.3%, or with stocks in Hong Kong down 9.6%... and let’s not forget the weakness in Brazil, where that market is down 10.5%. So, just as some here in the US say that this is not a stock market but a market of stocks, we say that global investing is not a global market but may be a market of specific spots around the globe.
That said, we are very gravely concerned about the validity of a bull market and the harsh reality of a bear market in global terms, for one after another after another of the various markets around the world is breaking upward sloping trend lines; has topped out well below previous highs and is making new and lower lows. This we find disconcerting and this we find worthy of note. It is time once again to seek the safety of the sidelines. This is not the time to be aggressively bullish of equities but rather this is the time for… as we say here in the South… “hunkering down,” for getting smaller, for curtailing exposure.
Perhaps Gartman will be right. Then again, at least in early trade things aren't looking too good:
- U.S. STOCK FUTURES EXTEND GAIN: S&P +23; NASDAQ +46, DJIA +160
Then again, with the market in the last two days acting very odd, driven entirely by stop hunts and gap chases, despite the early pre-Fed euphoria, perhaps this time Gartman will be right?