Having staked his reputation one week ago that the “bull market has come to an end“, the jury is still out on Dennis Gartman’s latest forecast, although one thing is becoming clear – the period of record low volatility has come to an abrupt end and the question is whether it now reverts (much) higher, or resumes its drift lower on more vol-selling and expectations that central banks will keep it all under control. And while we wait and see which way risk inflects, in his latest overnight note, the “world-renowned commodity guru” is out with an even more bombastic prognostication: “this may well be one of the most important
days in the future of the equity markets for a very long while” as it will either confirm or deny a rather unique technical pattern.
Below is the key excerpt from his latest, overnight note, with whose contents – we must admit – we largely agree:
STOCKS HAVE AGAIN FALLEN UNANIMOUSLY… AND MATERIALLY in global terms and what had heretofore been a rare circumstance when all ten markets incumbent in our International Index have fallen has now become commonplace for this happened one week ago today and it has happened yet again. Indeed, in the course of the past week, we’ve now seen three such ‘unanimous’ days, for on Tuesday stocks ‘unanimously’ rose. Such ‘unanimous’ days had, until this week, been a truly rare event and had in the past marked major turning points in the market, marking final periods of exhaustion to the upside or to the down. It is interesting that with all of these violent price movements, stocks in global terms as measured by our Index have move barely at all, for last week our Index was 11,168 and this morning it is 11,226, or 0.5% higher.
We do not and we have not ‘trusted’ equity valuations for quite some long while, believing that the markets individually and collectively have gone to levels that are not justified by earnings or economic fundamentals. The one fundamental that has been at work over the past several years has been the monetary expansions by the main monetary authorities: the Fed; the ECB and the Bank of Japan. Those authorities are now preparing to end their experiments with QE, and if they not prepared to end them they are at least prepared to slow down the seriousness of their expansions. This we find disconcerting.
This post was published at Zero Hedge on Aug 18, 2017.