Wednesday 23 December 2015

The ultimate contrarian indicator - Gartman

Its been a tough year for most traders, as the sp'500 has largely traded within the 2100/2000 zone. For many, it has felt like being stuck inside a washing machine on spin cycle. Someone who continues to rotate at 1400rpm is the infamous Gartman, who remains one of the ultimate contrarian indicators.


sp'weekly1b



sp'monthly1b



Summary

Re' weekly1b: aside from the Aug/Sept' upset, the sp'500 has been stuck with a relatively narrow 5% range.

Re' monthly1b: without question, the most important issue is whether the market can hold above the 10MA, which was decisively re-taken in Oct'.

A Dec' or Jan' monthly close under the 10MA should signal alarm bells. For now... lets see how the year wraps up.
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Looking ahead

Wed' will see a small wheel barrow of data...  Durable Goods orders, Pers' income/outlays, new home sales, consumer sent', and the latest EIA report.
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As for Gartman

First.. see HERE

Frankly, the gold bugs should be utterly terrified at Gartman's new bullish call for Gold.

Why would anyone think the recent low of $1045 was a core multi-floor for Gold? It makes no more sense than those who called $1321 a floor, 1179, 1130, or 1051.

Books always suggest intelligence, yes?

What will happen to Gold (or for that matter Oil) if the USD starts consistently trading above the DXY 100 threshold next year? It sure won't help, right?

I kinda feel sorry for Gartman. I have certainly had my times when I've been on the wrong side of almost every cycle for some weeks, or even a few months. I've found the only solution is to quit hitting the BUY or SELL button for at least a month or two.

Of course, Gartman won't do that. No mainstream commentator or analyst would ever announce they are sitting it out for a few months.


I will be looking for Gartman - and some others, to turn bearish Gold, somewhere in the $900/875 zone. If that is the case in late spring/summer 2016, well, it'd likely be the key floor many have been seeking since the commodity peak in 2011.

Goodnight from London