FYI | Apr 28 2006
by Rudi Filapek-Vandyck
Renowned commentator Dennis Gartman has his own ways for formulating things. They may sound a bit ‘masculine’ at times (we are certain it is not meant to offend the ladies) but it is the use of creative wording and references that makes reading his daily newsletter an interesting exercise, on top of all the market knowledge.
US equities are in a sweet spot at the moment. Gartman’s latest statement says it all in one sentence: economies always look at their best at the top, just as ladies always look their best just before closing time. What Gartman is trying to get across is don’t be fooled by the current buoyancy that comes from US economic data and indicators, they look good because the economy is ‘topping’.
Gartman’s gut feel tells him the peak is probably situated in the third quarter this year. This also suggests the good news show still has some more time left. Especially now that the Fed is flagging a pause in US interest rate hikes, although it will be interesting how the markets will take the hike in China.
Gartman, until a few weeks ago a fervent supporter of a stronger US dollar, has now conceded it looks like further weakness for the greenback is simply unavoidable. Pragmatic as always, he explains his recent decision to switch his personal stance as follows: "as Jesse Livermore so sagely told us in his "autobiography," Reminiscences of a Stock Operator, our duty is not to be on the bull side or the bear side but upon the right side… and the right side is the winning side. For the moment, and likely for the long foreseeable future, the right/winning side is that short of the [US] dollar."