FYI | Mar 02 2012
By Rudi Filapek-Vandyck
Dennis Gartman is "out". Out of US equities, that is.
In his daily newsletter, The Gartman Letter, sent to his global audience before the opening of the US session last night, the widely followed trader explains he sees increasing signals that the strong move upwards in US equities over the past few months is running out of breath.
In his own words: "It is time to exit entirely… We do not take this action lightly and we are fearful of what the markets might bring in the days ahead…"
Three specific signals that should attract every trader/investor's attention, according to Gartman, are the fact that on Wednesday (US time) all ten equity markets that make up Gartman's own international index closed noticeably lower on the day – a rare event, says Gartman. Secondly, the S&P 500 future has traced out a downward reversal sign and "only the foolish" ignore such signals, Gartman states.
Thirdly, the trendline which ran along the upward move from mid-December to this week now seems under real threat. Gartman believes a break through the trendline, which will end the upward move, is but a matter of days.
To put Gartman's move into the correct perspective: it is his view, as a trader of markets, that US equities remain in a "bull market" and in such an environment one only has three choices, in Gartman's view. Either position very, very bullishly, or position bullishly,or be neutral. Gartman has since mid-December gradually reversed his positioning from Neutral to very bullish, to bullish to now back to Neutral.
Meanwhile, technical market analysts at Barclays in London point out that, historically, March tends to be a less positive month for equities across the world than January-February.
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
