Posts Tagged ‘Gartman’
Friday, August 8th, 2008
Dennis Gartman says that the bull market in oil is over for now, and it could be as much as 2 years before it resumes. He goes on, when asked, to say that oil could fall below $80 a barrell and that he would leave the trading in oil to much smarter people. Given the risks, there are many other trades that he’s more comfortable with right now.
Click the image to watch:
Source: CNBC, August 8, 2008
Saturday, April 19th, 2008
April 19, 2008 – In a recent note Dennis Gartman opines that equity markets are stronger everywhere, but that stronger upside volumes would be more re-assuring.
The more we consider the notion put forth here yesterday (following the suggestion made to us by our old friend, Mr. Mark Fisher of MBF Trading in NY at his seminar earlier this week) that we wish to buy “Necessities” and to be short of “Accessories,” the more we like it.
Consumers… as their job prospects weaken; as unemployment rises; as they begin to save more and spend less… will abjure Tiffany’s, and Coach, and Harley Davidson, and WholeFoods and will embrace Wall-Mart, and Johnson & Johnson, and Proctor and Gamble. They will abjure Moet Chandon; they will embrace Budweiser. They will toss of Panera Bread; they will instead buy Kellogs’s products.
Look then at the charts of each, and the “Necessities” are, as we like to say, moving from the lower left to the upper right, while the “Accessories” are moving from the upper left to the lower right.
Click below for the complete story
Tags: Canadian Stocks, Chart, Coach, Commodities, Dennis Gartman, Economy, Gartman, Harley Davidson, Johnson & Johnson, Kellogs, Mark Fisher, Markets, MBF Trading, New York, risk, Tiffany, Trading
Posted in Commodities, Markets | Comments Off
Tuesday, January 22nd, 2008
Jan. 22, 2008 – Phew! Finally some sense prevailed at the Fed with an astonishing cut of 75 bps and 25 bps from Bank of Canada. What a turn of events. There hasn’t been a rate cut like this since the eighties.
Well, here we are in the midst of a global panic, and the media has been all over it, doing its best to carry the news of the panic. That’s why its really important to keep a clear head here, and cut through the clutter.
Emerging markets and commodities are still the strongest bets globally. Emerging markets have been operating from a higher quantum of growth roughly 2-3 times that of industrialized economies. In fact, emerging markets have been dealing with inflationary pressures. A recession in the west relieves some of that pressure, and that is good news. Fact is, the BRIC will still be in need of the raw materials, metals, oil and food, and that demand growth is expected to continue well into the next two decades. So why are they selling off?
The headlines say that demand from emerging markets for commodities will decline and that’s why they are getting hit hard. The real story is that they have been the best performing assets out there, and that is the easiest place to raise cash given the outstanding obligations of the credit market. Those responsible plain and simply need the cash, to refinance their obligations, and to shore up their balance sheets.
Who is doing all of the dumping of stocks? It is most certainly NOT you and me, or the average investor. We are just supposed to stand by and watch this happen.
Its a cabal of large institutional so-called ’smart money’, hedge funds, and currency traders that have driven this market to its present levels.
The credit market (subprime) meltdown, and the credit default swap meltdown, with the failures of MBIA, AMBAC, and ACA, that is following on its heels is the first part of this. The losses at the investment banks are precipitating the repatriation of capital in order to shore up balance sheets. The large proprietary traders are selling off their fundamentally strongest holdings with the biggest gains, in such things as commodities and emerging markets, to accomplish this. This amounts to a giant MARGIN CALL against these obligations. So, Canada and Emerging Markets are not selling off because there is something terribly wrong with them; it is because the biggest players need to get their hands on cash.
Cut through the clutter and you get to the unwinding of the carry trade. This most likely is the largest contributor to the ’round the world’ sell-off.
The slide of the dollar as a result of out-of-sync interest rate cuts, the late start in cutting rates by the Fed to get around the subprime and CDO meltdown, followed on by the ECB and BoJ’s reluctance to cut rates or print money is now leading to a wholesale unwinding of yen/dollar carry trade. And it is BIG. This, in our humble opinion, is the real source of indiscriminate selling of equities which explains why we have seen the kind of volatility we are seeing in the BRIC, emerging markets, and Australia and Canada.
Here’s what’s at the heart of it.
Tuesday January 22 2008
By Masayuki Kitano
TOKYO, Jan 22 (Reuters)
…The dollar hit a 2-1/2-year low of 105.61 yen on electronic trading platform EBS early on Tuesday, but later pared its losses and stood at 106.16 yen as of 0322 GMT…
The euro fell to a five-month low of 152.32 yen on EBS, while sterling fell as low as 204.87 yen the lowest since April 2006. They later rebounded off those lows.
“…It’s a combination of carry unwind and repatriation, as well as little or no chance of rate hikes being priced into the high-yielders,” says Gerrard Katz, head of North Asia FX trading at Standard Chartered.
“…Yen carry unwinding might, say, account for about 5 out of 10 of the entire move, with short-term speculators accounting for the other 5 or a bit more,” said a vice president for foreign exchange sales at a European bank…
From Bloomberg – Jan. 21 (Bloomberg)
“…What we are seeing now is investors pulling out of their profitable trades because of risk aversion,’’ said Bilal Hafeez, London-based global head of currency strategy at Deutsche Bank AG, the world’s biggest currency trader. “You see the euro coming off, a decline in emerging-market assets and a rally in the yen.
They are typical signs of carry trades being unwound…’’
“…Investors are likely to continue to liquidate their carry trades in coming weeks, said Neil Jones, head of European hedge fund sales at Mizuho Capital Markets in London. Jones predicts that a weekly close below 154 yen (vs. Euro) will “trigger a wave of sell signals’’ for the euro. He said the yen could rise to 100 per dollar by the end of March…”
To wit, in advance of the unwinding, you can bet that some of these ’sophisticated’ investors who borrowed in yen to invest in higher yielding opportunities elsewhere, covered their own backsides with short positions which they will undoubtedly cover once they are through unwinding their yen carry trade bets that are taking the market down. Hold on to your seats for now…and bet on a bounce at the other end.
This may prove to be the contrarian opportunity of the year to get some (more) exposure of those hard hit commodities and emerging markets. As per Dennis Gartman and Doug Kass, lets be careful out there.
Tags: Aca, Ambac, Asia, Australia, Balance Sheets, Bank Of Canada, Banks, Blog, Bloomberg, Bps, Brazil, BRIC, BRICs, Canadian Market, Carry Trade, Chart, China, Commodities, Credit, Credit Default Swap, Credit Market, Currency, Currency Traders, de-coupling, Dollar, Easiest Place, ECB, Eighties, Emerging Market, Emerging Markets, energy, Euro, Fed, Gartman, Global Panic, Hedge Fund, Hedge Funds, India, inflation, Inflationary Pressures, Investment, Investment Banks, Investment Strategy, Latin America, Markets, Mbia, Meltdown, Metals, oil, Rally, Recession, Repatriation, risk, Russia, Selloff, Smart Money, Trading, UK
Posted in Commodities, Credit Markets, Emerging Markets, Markets, Oil and Gas, US Stocks | Comments Off
Saturday, January 12th, 2008
Dennis Gartman is selling half of his gold position. His argument is that gold has reached an interim top citing a ‘perfect storm’ of media fanfare, rising Democratic Party leftism, Countrywide’s failure, and deteriorating economics fundamentals, and while he feels that gold will likely be at higher prices next year, it will retrace to around $800 before turning up again. He holds a position in GLD.
Wed. Jan. 9 2008 | 7:35 AM[04:58] Copyright CNBC 2008
Insight on gold’s record, with Dennis Gartman, The Gartman Letter founder and CNBC’s Becky Quick
Tags: Becky Quick, Blog, Commodities, Currency, Democratic Party, Dennis Gartman, Economics, Gartman, Gold, GreenLight Advisor, media fanfare, Miscellaneous, Technical Analysis, usd, Video
Posted in Commodities, ETFs, Gold | Comments Off
Saturday, January 12th, 2008
DENNIS GARTMAN’S NOT-SO-SIMPLE RULES OF TRADING
1. Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position… not ever, not never! Adding to losing positions is trading’s carcinogen; it is trading’s driving while intoxicated. It will lead to ruin. Count on it!
2. Trade Like a Wizened Mercenary Soldier: We must fight on the winning side, not on the side we may believe to be correct economically.
3. Mental Capital Trumps Real Capital: Capital comes in two types, mental and real, and the former is far more valuable than the latter. Holding losing positions costs measurable real capital, but it costs immeasurable mental capital.
4. This Is Not a Business of Buying Low and Selling High; it is, however, a business of buying high and selling higher. Strength tends to beget strength, and weakness, weakness.
5. In Bull Markets One Can Only Be Long or Neutral, and in bear markets, one can only be short or neutral. This may seem self-evident; few understand it however, and fewer still embrace it.
6. “Markets Can Remain Illogical Far Longer Than You or I Can Remain Solvent.” These are Keynes’ words, and illogic does often reign, despite what the academics would have us believe.
7. Buy Markets That Show the Greatest Strength; Sell Markets That Show the Greatest Weakness: Metaphorically, when bearish we need to throw rocks into the wettest paper sacks, for they break most easily. When bullish we need to sail the strongest winds, for they carry the farthest.
8. Think Like a Fundamentalist; Trade Like a Simple Technician: The fundamentals may drive a market and we need to understand them, but if the chart is not bullish, why be bullish? Be bullish when the technicals and fundamentals, as you understand them, run in tandem.
9. Trading Runs in Cycles, Some Good, Most Bad: Trade large and aggressively when trading well; trade small and ever smaller when trading poorly. In “good times,” even errors turn to profits; in “bad times,” the most well-researched trade will go awry. This is the nature of trading; accept it and move on.
10. Keep Your Technical Systems Simple: Complicated systems breed confusion; simplicity breeds elegance. The great traders we’ve known have the simplest methods of trading. There is a correlation here!
11. In Trading/Investing, An Understanding of Mass Psychology Is Often More Important Than an Understanding of Economics: Simply put, “When they are cryin’, you should be buyin’! And when they are yellin’, you should be sellin’!”
12. Bear Market Corrections Are More Violent and Far Swifter Than Bull Market Corrections: Why they are is still a mystery to us, but they are; we accept it as fact and we move on.
13. There Is Never Just One Cockroach: The lesson of bad news on most stocks is that more shall follow… usually hard upon and always with detrimental effect upon price, until such time as panic prevails and the weakest hands finally exit their positions.
14. Be Patient with Winning Trades; Be Enormously Impatient with Losing Trades: The older we get, the more small losses we take each year… and our profits grow accordingly.
15. Do More of That Which Is Working and Less of That Which Is Not: This works in life as well as trading. Do the things that have been proven of merit. Add to winning trades; cut back or eliminate losing ones. If there is a “secret” to trading (and of life), this is it.
16. All Rules Are Meant To Be Broken…. but only very, very infrequently. Genius comes in knowing how truly infrequently one can do so and still prosper.
Tags: Academics, Agriculture, Bear Market, Bear Markets, Blog, Bull Markets, Canadian Stocks, Carcinogen, Chart, Circumstance, Commodities, Complete List, Correlation, Currency, Dennis Gartman, Economics, Gartman, Greatest Weakness, Greenlight, Ground Experience, Illogic, Investment, Investment Strategy, Investment Wisdom, John Mauldin, Keynes, Markets, Mental Capital Trumps Real Capital, Mercenary Soldier, Miscellaneous, Paper Sacks, risk, Rocks, Simple Technician, Strength And Weakness, Trading, Trumps, Weakness Weakness, Winning Side
Posted in Commodities, Markets | Comments Off