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"We Have Been Wrong... Badly": Gartman Covers Short, Expects "Violent, Panic Rush Skyward" In Stocks

Back in January 2016, Dennis Gartman said that oil would "not hit $44 during my lifetime."

 

Then, just a few months after oil jumped above $44, yet failed to kill the "world renowned" commodity guru, Gartman made another bold prediction: "oil is not going above $55 for years." Predictably, just over a year later, oil hit $57, the highest price in two and a half years.

Fast forward to today when we have some bad news for equity bulls and some good news for bond bulls.

First, Gartman unveiled that he is shorting bonds, whose "bull 35 year market ended last autumn":

NEW RECOMMENDATION: The 35 year bull market in bonds ended in the autumn of last year when the bond future traded to $175; it is now $155 and although we might have missed the first year of the new bear market we are  still very early. Nonetheless, after 7 days in a row to the upside, the bond future is moving back into “The Box” marking the 50-62% retracement of the break that bean when the bond future peaked recently at $158 3/8’s and fell to $150 ½. If the nearby bond future is able to trade to $154 ½ today we’ll sell it there… one unit being sufficient. We’ll have stops in tomorrow’s TGL if the trade is effected later today.

Second, the frequent Fast Money guest announced with great fanfare that he is closing his equity short, in anticipation of a "violent, manic" surge higher in the market:

We have been wrong… badly… in taking even a modestly bearish view of the global equity market and effecting that bearish view via a position in out-of-the-money puts on the US equity market bought a week and one half ago. Fortunately we effected that bearish view with puts rather than with direct short positions in equites and/or via short position in the futures themselves, so the damage wrought has been minor. But the real damage is that we are not long of equities as obviously we should have been. Our position has to be covered and covered it shall be, for we fear that we are about to enter that violent… and ending… rush to the upside that has ended so many great bull markets of the past. At this point, the buying becomes manic and prices head skyward. Speculation is the order of the day, not investment and when such periods have erupted in the past prices have gone parabolic until such time as the last bears have been brought to heel and the public has thrown investment caution to the wind. We’re there now; this may become wild.

And so the slam dunk pair trade has been set. Trade accordingly.