Yesterday, when we wrote that "Gartman remains bearish of stocks" we cited the "commodity king" as follows:
... we are still going to err bearishly of stocks and certainly we shall not err bullishly of them. We are, in our retirement account here at TGL long of gold in EUR and Yen related terms; we are long of a small position in the corn ETF and we are long of the bond market ETF, which tends to be a bearishly construed position. As of the close of trading yesterday we are +8.2% for the year-to-date, compared to the loss thus far this year of our International Index of 3.0% and compared to the small gain by the S&P of 0.5%... a gain that many shall tout as evidence of a great bull run. We shall not.
On the other hand, we said that "we shall expect another ~1% rise in the market." We were close.
In any case, after having flipflopped two weeks ago when Gartman against went bearish "of stocks" on March 16, by buying the VIX as stocks were about to take out their 2016 highs, Gartman has finally thrown in the towel. From his latest letter:
SHARE PRICES HAVE CONTINUED THEIR RUSH SKYWARD following Dr. Yellen’s “All-Clear” signal to the investment world Tuesday when she spoke to the Economics Club of New York, telling the world that it was she and no one else at the Fed who was in charge of monetary policy and said, without equivocation that the Fed under here aegis will not be tightening monetary policy any time soon. This is, it seems, the best of all equity investment worlds where economic growth is slow but steady; where inflationary pressures… at least in the eyes and mind of the “authority”… is not problematic and shall not be, and where monetary policy shall be accommodative.
We may not agree with what Dr. Yellen is proposing… and what she will pursue… or why she is proposing and pursuing it… but it is not our duty to argue and then to take positions openly at odds with her, for as the great, departed and greatly missed Mr. Marty Zweig always said, “Don’t fight the Fed.” It is our duty, instead, to understand that the Fed’s “margin account” is far larger than is ours; that it is effectively unlimited and that as the equally great Lord Keynes said, “The market can remain irrational far longer than we can remain solvent.” We may think Dr. Yellen’s actions are irrational; we may see them in the end as being disastrous; we may fully expect them to come to naught and very probably they shall, but taking positions in opposition them and to her shall cause us to lose both mental and real capital. It is a fight we may win eventually, but eventually can be a very, very, very long while off into the future.
To this end, we note then that our International Index has gained 79 more points, or 0.9% since yesterday, but even so it remains down for the year-to-date by 2.1%. Stocks here in the US, however, as measured by the S&P are actually higher by 1.0% while we here at TGL, in our retirement fund, are up 6.7%, with our “out-performance” relative to global and domestic stocks narrowing rather sharply yesterday. We enter today’s markets long of gold in EUR and Yen related terms; long of the long end of the US bond market via the 20 year bond ETF; long of small position in an oil E&P producers and long of another small position in the corn ETF. We have no actual net long or short position in equities, however.
The rally may be on its last legs.