Back in February Dennis Gartman, publisher of The Gartman Letter announced the he was exiting all his bullish positions and rushing to the sidelines.Now stocks have been hitting all-time highs.
In an interview with CNBC, Gartman said he was wrong on stocks, “wrong 3 per cent”, but that he’s going to stay on the sidelines.
In his latest note, he explains why he is sticking to his decision to stand down:
“We are, and we have been, concerned about insider selling; we are and we have been concerned about the rising level of confidence in a steadily rising equity market amongst those who were only a few weeks ago were convinced of the same markets inherent weakness; we are and we have been concerned about the lack of volume on the upside and these concerns seem not to go away.
“However, what truly concerns us is the fact that as insider selling has risen, corporate buying of those same securities has also risen. We have to wonder aloud why it is to be considered bullish of shares when corporate insiders are selling their shares even as they mandate that their corporations buy shares on the open market? This bothers us, and it bothers us greatly. In that environment, the sidelines seem even more inviting.”
When he announced that he was exiting his bullish positions, Gartman’s rationale was there was a shift in “tectonic plates” in “all of the capital markets”. It hinged on a technical breakdown in markets and on the Fed’s “punch bowl” being taken away.
Gartman said he would buy stocks again after a six – seven per cent correction.
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