This past Friday morning, when the tremendous bear market rally finally fizzled after an initial spike higher following by gradual daylong selling which closed the market in the red, following by another red close on Monday, we warned the bulls early that the "Rally is in Jeopardy" for one simple reason: Gartman had covered his shorts.
As a reminder, this is what he the perennial CNBC guest said early on Friday morning:
We have been short one unit of equities in rather global terms, by being short one third of a unit of US equities; one third of a unit of the EUR STOXX 50 and one third of a unit of the Nikkei. The trade started off properly and almost immediately we were profitable; however we are now almost at a small loss on the trade… and actually we are marginally profitable. This is a concern and we fear that perhaps we are about to see a period of time when the monetary authorities throw caution to the inflationary wind, expand the supply of reserves to the banking systems around the world in a fashion that really can only be considered egregious with caution tossed to the winds. That is, we may be in for a period of time when gold and equities move in tandem together to the upside.
At any rate, although we were willing to risk this position rather materially from its outset, we are not willing to do so now. Hence, rather than waiting to be stopped out of our position some 3+% higher we wish to cover the position immediately upon receipt of this commentary, taking a very small profit and refraining from taking a loss and living to fight another day and in the end succeed.
We were particularly amused because just one day prior, Dennis said that "there are many still arguing that this is not a fully-fledged bear market, but they are wrong. This is not only fully fledged, this is a fledged carnivore rather than a herbivore, for this bear market is consuming everything in its path with no intention of slowing down its “eating” habits."
So from "carnivorous bear market" to covering shorts in one day.
In any case, having lost money once again on his "net long" position over the past 48 hours, Gartman has done what he does best - we won't even use the term any more - and has decided to troll not just his readers and this website, but certainly the CTAs who went short yesterday, and announced that he is once again short.
We are selling the markets short once again, having been short recently and having covered that short only a “short” while ago. But we are sellers once again this morning, noting that as the global markets have rallied they have done so on lesser volume on balance. Volume should follow the trend and the trend and volume are pointing lower, not higher.
Thsi may or may not explain why US equity futures are up nearly 1% as of this writing.
We close with some more inexplicable Gartman P&L math:
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. We have been very fortunate, hoping that our good fortunate shall obtain a while longer.
If anyone figured out how that works, please let us know.