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Gartman: "We Find Ourselves Turning A Good Deal More Bearish On US Equities"

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Just when you thought it was safe to dip on the short side, here comes Gartman (and sadly we no longer recall if he was bullish or bearish last, at this point it is a daily blur based on what the S&P did in the handful of minutes just prior to the latest Gartman letter is released to the pulic)...


We find ourselves turning a bit more bearish of equities in global terms and quite a good deal more bearish of equities here in the US,
for a number of reasons.




Firstly, we continue to look upon the peak in margin usage which was forged back in mid-’15 as evidence that a peak has been made, for margin usage tends to “top out” a year or more ahead of the equity market itself.




Secondly, we are more and more dismayed by the manner in which even the slightest “miss” regarding earnings manifests itself in sharply weaker share prices, and nowhere was that more evident than in the collapse of Alcoa’s price last week when earnings missed by only a few cents/share and yet share prices were down nearly 15%.




Thirdly… and this is perhaps a bit “parochial” in scope, but the close on Friday was disturbingly ill, for after having opened sharply higher in the morning, the close hard upon the day’s lows.
This is not how healthy markets trade; this is, however, how ill markets turn for the worse.




As we write, stock index futures are trading weaker and the charts are taking on decidedly bearish prospects. As evidenced by the chart at the lower left of p.1, the still rather well defined upward sloping trend line remains intact… but only just barely.




Merely by moving sideways today that trend line shall be in danger of being broken and if the market were to go sideways today and remain there through Wednesday,
for example, it will truly be definitively broken. Also we note that the CNN Fear & Greed Index has fallen modestly, but what is most important is that the Index, having “consolidated” over the course of the past month and one half between 50-60 has broken to the downside. Before this bearish run has run its course we shall see this Fear & Greed Index make its way down below 20, signaling a severely over-sold market at that point:


Well, actually, ill "markets" only respond to central bankers' every whim, and with the dovish Stan Fischer set to speak, there is a very high probability that Gartman will once again have perfectly timed the market's inflation point, this time to the upside, which is not to say Gartman's three reasons to turn bearish are wrong: they are actually spot on, which is why they are also largely "priced in", if only by the algos and other central banks. To those planning on shorting the S&P, you have been warned.





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