The Tell: This could be the start of a bear market of ‘serious vintage,’ warns Dennis Gartman
The U.S. stock market got off to another weak start on Wednesday, with investors taking the risk-off approach amid dropping oil prices and fears that President Trump’s tax reform plan could get hung up in Congress.
It’s not just happening in the Dow Jones Industrial Average DJIA, -0.57% and S&P SPX, -0.49% either. Equities are under pressure globally, with trend lines being broken across the Nikkei NIK, -1.57% the Dax DAX, -0.44% and just about everywhere else.
‘The bear is upon is, we fear.’
The “universal” nature of the broad retreat is “quite rare” and something we typically see at “major turning points,” according to Dennis Gartman, whose latest missive was published on the Zero Hedge blog.
In fact, he warns that we’re seeing “a harbinger of further material weakness” that sets the stage for “a bear market of some serious vintage.”
Oddly — or maybe not — this is taking place “as the world’s economies are in the best synchronous strength we’ve seen or noted in many, many years,” Gartman said. But that, he explains, is typically the case when the bull market is dying.
“All bear markets begin when economic activity is indeed at its peak just as all great bull markets begin at the depths of economic activity,” he wrote. “It’s always been thus and it shall always be thus. The equity market, by its very definition, anticipates the change in the economy, rising before the economy rises and falling before the economy falls.”
Gartman says we’re at the latter tipping point.
“It has been months in the coming, but it is here and adjustments in one’s investment policies must be made accordingly,” he said. “The bear is upon is, we fear.”
But before you go and partake in those “adjustments,” know that some view Gartman, like many a high-profile commentator, as a contrarian indicator.
One popular financial blogger shared his thoughts:
“The bear is upon us, we fear” – Gartman
“This is just a long-overdue technical correction” – my cat
— StockCats (@StockCats) November 15, 2017
In one of Gartman’s more famous misfires, he predicted he wouldn’t see crude oil CLZ7, -0.81% move back above $ 44 a barrel in his lifetime. Well, it’s at $ 55 right now, and he’s still alive and banging out his newsletter.