Participants Are Not Prepared For This Looming Bear Market
$DIA, $SPY, $QQQ, $USO, $C
Dennis Gartman, the publisher of “The Gartman Letter,” says that he thinks stocks are in “a very real Bear market,” having failed to make new highs and demonstrated poor volume and breadth.
He also fears that most participants are not prepared at all for Mr. Bear.
Mr. Gartman callS the circumstance “very dismaying” and pronounced himself “very Bearish” of stocks. “I would much rather be Bullish. It is much more fun to be a Bull in a Bull market. In a Bear market you have to be more careful.”
He observed that energy has been a “harbinger” of where the market was headed. He thinks 50 bbl will be Crude Oil’s new high, after the price dove 8% Tuesday, following a 3-day rise of 27%, the biggest Northside move in 25 years.
WTI Crude Oil is currently trading at 46.03, -0.48% on the day.
Wednesday at the close: DJIA +293.03 at 16351.38, NAS 100 +113.87 at 4749.98, S&P 500 +35.01 at 1948.86
Volume Wednesday was above average, more than 1-B/ shares changed hands on the NYSE.
- NAS 100 +0.3% YTD
- S&P 500 -5.3% YTD
- Russell 2000 -4.8% YTD
- DJIA-8.3% YTD
Expect that accommodative Fed policy will continue to force participants into risk assets, read “buy on dips.”
Moody’s says that US GDP is over 3%, citing an Atlanta Fed estimate of 1.3%, and he sees S&P sales up by less than 1% Y-Y, so managers will have to rethink CAPEX and hiring.
The energy analyst at Citigroup (NYSE:C) explained how the glut of Crude Oil brought an end to the 3-day, 27% spike in prices, the biggest since Y 1990, mostly came on the notion that OPEC was willing to talk about cutting production in order to support prices, not a actual change in policy. Fundamentals have not changed.
Stay tuned, but tune out the Noise…
HeffX-LTN
Paul Ebeling
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