Exactly three weeks ago, as stocks were sliding, “world-renowned commodity guru” Dennis Gartman provided a glimmer of hope to bulls when he made an “official recommendation to sell stocks short this morning.” Why was this important? Well, Ramp Capital (with whom we need to have a trademark conversation one of these days) put it best:
— Ramp Capital+ ♿️ (@RampCapitalLLC) May 15, 2019
Fast forward to today when, following today’s massive rate cut-hope driven rally on the back of an absolutely abysmal job report, it is the bulls’ turn to cower. Why? Because Gartman’s “official recommendation” to short is no more. From his latest Gartman report.
… as we wrote here yesterday, we have had a most unusual series of technical trading circumstances take place recently as late last week we had a rare “unanimous” day lower for stock prices globally, followed two trading sessions later by an equally rare unanimous day higher! Truly we cannot remember when we’ve seen this unanimity to the downside followed by unanimity to the upside in such inordinately short order. We have been left to wonder if that unanimous “up” day marked the end of a short bull run or did it add to the unanimous nature of the end to the bear run of much larger proportion? All we know is that we’ve not seen this sort of violence down and then up ever before and one or two wise readers of TGL suggested that the violence of the recent past two weeks warns of continued such violent random noise and argues then for us to take to the sidelines.
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We’ve continued to maintain a net short position in the equity market in the US put into place five weeks ago… although we’ve cut the size down a bit these past two days… Yesterday was a much better day for us than was the day previous but we face today’s trading environment with a sense of trepidation and confusion…
Friday, May 17th, having already sold equities vs. commodities and as the markets had risen into “The Box” marking the 50-62% retracement of the break that began on the 1st of this month, we sold a single unit of the US stock market short of the July S&P futures trading then 2870. We sold a 2nd unit Thursday, May 23rd to add to the position as the July futures traded 2840, which then gave us an average of 2855. We wished to risk no more than break even on a closing basis but we are breaking even as we write and we want out… immediately.
The bounce is finally over.