One Day After Biggest Rally Since March, Gartman Covers Shorts
Just hours after the biggest one-day surge in the S&P since March, Dennis Gartman has decided to follow the momentum, and after being bearish and short, he “covered in a great portion of our short derivatives position and we added to our long position.”
From his latest letter:
STOCK PRICES HAVE SOARED IN THE PAST TWENTY FOUR HOURS as the news spread around the world from late Sunday afternoon regarding the now famous “letter” from the FBI’s Director, Mr. Comey, to the members of the US Congress that there was nothing in the several tens of thousands of new e-mails that the Bureau had warned about two weeks ago that would lead to the possible indictment of Ms. Clinton. When that news “hit” Sunday afternoon, stock index futures soared; the Asian markets flew to the upside and when the European and North American markets finally did open they followed suit.
Our international Index has risen 138 points, or 1.4%, and this is one of the five strongest “up” sessions in the history of our Index which goes back for nearly thirty years. Indeed, this was one of those rare “unanimous” days where all ten of the markets comprising our Index have risen, taking stocks around the world up 4.9% for the year-to-date. The CNN Fear & Greed Index, which had fallen to 12 at its low on Friday, has risen to 33 as of last night’s close and having fallen below 15 and having turned around is now signaling a run to the upside once again… barring a surprising victory by Mr.
Trump in today’s Presidential voting.
If Ms. Clinton wins and if the Senate and the House remain in Republican hands all will be fine. Mannerly gridlock is the best of all governments; it is what the Founding Fathers of this country wanted. They did not wish for one-sided governance; they wanted balance and compromise. They wanted laws enacted slowly after deliberation, and that is what it appears we shall have if the latest polls prove prescient.
In our retirement fund here at TGL yesterday we did what we said we would do given the severity of the rally: We covered in a great portion of our short derivatives position and we added to our long position in the shares of a foreign steel producer immediately upon the opening of trading on the NYSE. We did more of the same mid-morning and by the day’s end finished effectively market neutral. We shall be buying in more of our short derivatives position in the course of the next few days, and almost certainly we’ll be adding to our long position in steel. Finally, we have done nothing to our long position in gold, predicated in EURs, but we may soon be adding too to that position.
Good luck to all.