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Gartman: “This Bear Market Is Bouncing Very Hard”

Courtesy of ZeroHedge. View original post here.

Last Thursday morning, just as markets appeared to bottom, we advised readers to mind their bearish stops because earlier that day, Dennis Gartman declared (again, after recently turning bearish just a few weeks ago) that "this is now a bear market" and "strength is to be sold into", to wit:

[S]trength is to be sold into; weakness is only to be bought after the market has been sold. If one sells a thousand shares on strength, on weakness one might wish to buy back only half of that, with the intention of selling another thousand on any subsequent strength. This is now a bear market; trade then accordingly

The commodity guru also was quick to press his S&P short, saying "our average price is now $2749 as the market is $2719 as we finish this morning and we shall move our stop down from $2747 to $2741… using our usual “hour or so” methodology to protect this profit from becoming a loss" to which we responded that "this means that a spike to 2741… is effectively guaranteed." Just 3 days later, ES is now trading at 2773, so Gartman did it again.

So after the furious "trade war" rally of the past three days, has Gartman flipped again and is he now bearish? With out condolences to the bears, the answer is no.

SHARE PRICES ARE UNIVERSALLY HIGHER IN GLOBAL TERMS as all ten of the markets incumbent in our International Index have risen with three of the ten… the markets on the mainland in China, in Hong Kong and in Tokyo… having risen by more than 1%. Our Index has risen 81 “points” or +0.7% from where we had marked it on Friday, but it is still down for the year-to-date having fallen from December 31st’s 12,157 to this morning’s 11,966 or -191 “points” or -1.6% for the year-to-date. 

Nonetheless, bear markets bounce, and they can and will bounce very hard as this one is doing presently, taken higher by the fact that the US economy is indeed “Hitting on all cylinders” with unemployment falling; with employment rising and with the public’s general psychology toward the economy improving by the hour et al. Friday’s Employment Situation Report certainly did nothing to inhibit the “bounce” that is taking place as we write, and we are all the more impressed with the global market’s collective ability to take the ill geopolitical news out of the Korean Peninsula in stride; to “shrug” that news off and to fly higher.

And speaking of virtual money:

As for our retirement account, we made no changes on Friday but we will be stopped out of our short derivative position in SDS this morning almost certainly. We are long of FAX and TCRD for their income streams and we are still long of HCLP as a surrogate position in the energy market. We may add to all three of the latter positions this morning.

So yes, 2,800 appears imminent.


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