Gartman Makes "Watershed" Call: "Equity Markets Have Hit A Multi-Year Top"
Today is a "watershed" day, at least according to Dennis Gartman, who just hours after "covering his small remaining short position" has flipped again and is staking his reptuation that the market top is finally here.
The world-renowned commodity guru writes that his "long-time clients know that we do not write WATERSHED reports often and indeed we’ve not written one in many years... in fact we cannot remember when we put forth the last one but it was several years ago certainly" but today is one of those days when "we put our reputation hard upon the line... and we are doing so today, calling for a major, multi-year top on the equity markets following the recent volatility and following the reversals to the downside that took place yesterday in the Dow Industrials; the NASDAQ; the S&P and the Russell 2000."
What is amusing is that as even Gartman notes "Market tops are hard to call; they take time to develop; they are messy, confusing, often embarrassing events that make those of us in the prognostication business appear beyond foolish at times as we try to fit an evolving thesis into an even more difficult evolving environment." Which is ironic because as readers know, all it takes for Gartman to change his opinion is a 1% move in either direction for the "guru" to change his mind.
However, he adds, "the more we consider what we’ve written and what we’ve said in speeches and on television regarding the movement by the monetary authorities to slowly removed the excess reserves they’d added to the banking systems and to the economies, and the violently random has been the trading environment of the past two or three months, with volume coming in as prices weaken and waning as prices advance, the more certain we are that henceforth when we trade equities we shall trade from the short side or we shall not trade at all."
So what, according to Gartman, happens next?
We have lived through several great bear markets and perhaps that colors our thinking too egregiously, but we remember that the Dow fell from just over 1,000 to nearly 400 back in the early 70’s… and yes, the Dow really did trade down to triple digits back then, noting that recently the Dow “moved” more in one trading session than it actually was in the summer of ’74! At the peak, everyone was bullish; at the peak the Nifty Fifty were the FANGS of the day and everyone, everywhere owned them, believing them to be invulnerable. Many fell by 50, 60 even 80% when the bear market inevitably ran its course.