FYI | Apr 13 2006
Out of the ten markets comprising Dennis Gartman’s international index, eight have fallen quite smartly this week. The German DAX traded through 6000 but failed to hold that figure.
Gartman ruminates over the number of times a "big figure", that is a nice round number of undue psychological import such as 6000, has proven to be a major turning point in the history of markets – from the Dow to soft red winter wheat. Gartman now believes the DAX looks vulnerable.
Vulnerability is becoming a bit of a common theme in world markets. The Russian index has nearly tripled in a year. Very vulnerable to selling, says Gartman. And then there’s the Middle East.
The Abu Dhabi market has fallen 30% since last May and has tried but failed to rebound. It has since been experiencing a succession of lower highs. So too the market in Qatar. So too Bahrain which has twice failed badly since its November peak.
That’s all well and good, but what of the real markets, in North America and Europe?
Gartman is more and more concerned. He is short US shares and beginning to think of adding to that position. He notes the US public seems interested only in finding things to buy. His conclusion? "Be afraid, then be very afraid".
Australia came off quite a bit yesterday.
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