On Friday, just as the market was rebounding off its lows, helped by a bounce in DB stock price off its all time lows by a now discredited rumor reported first on Twitter and then on the otherwise reputable AFP, Gartman proclaimed that “This Selling Cascade Could Become Very Serious Indeed“, and flopped back to bearish. Stock proceeded to soar by more than 1%, before the DJIA closed over 160 points higher.
Overnight, with momentum having shifted, Dennis Gartman did what he does best, he chased it, and as of this morning Gartman laments that he was “not that wise; nor are we that courageous” to go long on Friday, and as a result proclaims in his latest note that “we are to learn today never to fight the collective force of the central banks in aggregate either, but should instead see this as a wind at the stock market’s collective back.“
SHARE PRICES HAVE RISEN QUITE SHARPLY since we marked them here on Friday and when we were marking them then the world seemed to be a place of confusion and of massive, new, immeasurable risk as Deutsche Bank’s shares were collapsing and as the world seemed destined for a spate of horrific new economic weakness rather than strength. We were responding to those concerns. The world did indeed seem to be foul place at the time and certainly it did seem to us… and to quite a few others… that the risk levels had reached an intolerable point that made long positions ill-advised.
We cannot defend ourselves from our fears at that point, for with the great benefit of hindsight perhaps we should have understood that the pressures being put upon the Deutsche Bank by the American government in its demand for a fine of $14 billion would be ameliorated in some manner. Perhaps we should have understood that the demand for that fine was solely and completely one of political expedience as the Obama Administration wanted to appear to be rather obviously anti-Wall Street and rather more obviously set upon teaching capitalism a lesson, but would also be amenable to some lessening of the fines in question so that a substantive sum of money could be secured from a foreign, global bank prior to the November election. With the benefit of retrospect, perhaps we should understood the mendacious nature of the Obama Administration specifically and of the Left generically and should have anticipated some resolution to this problem as reported by The Financial Times and by the Agence France Presse.
Yes, perhaps we should have known that the whole US government attack upon The Deutsche Bank was political in nature and that it would be resolved not from an economic perspective but from a political one instead. But amidst the chaos of Friday morning and amidst the collapsing stock markets evident at the time, and amidst the shocking weakness of the EUR on all fronts… relative to the dollar; relative to the Swiss franc; relative to gold et al…perhaps we should have decided then that the streets were running with figurative blood and that the time had come to turn bullish of shares… perhaps. But we are not that wise; nor are we that courageous that we shall step out into heavy traffic and dodge the dangerous cars and trucks of ill fortune that seemed so intent at the time to kill us at a moment’s notice.
If the US government is intent now to let the Deutsche Bank off with a relatively small fine… and $5 billion or so seems like a rather archly punitive fine of the first order, but that’s another question for another time… then perhaps the “Zimbabwe-isation” of the global capital markets remains firmly intact. This process of global monetisation on the part of the major central banks is still firmly intact and is not going to go away anytime soon and it is this process that does trump all else. If the great Marty Zweig taught us all decades ago never to fight the Fed, then we are to learn today never to fight the collective force of the central banks in aggregate either, but should instead see this as a wind at the stock market’s collective back.
Where are we now? Well, US equity futures have rolled over, and were near session lows as of moments ago while Europe had erased all overnight stock gains, as attention once again turns to Deutsche Bank.
The post After Warning Of “Selling Cascade” On Friday, Gartman Turns Bullish appeared first on crude-oil.top.