This is a “watershed” moment for stocks, says economist and commodities trader Dennis Gartman. In his latest newsletter he warns that we now face “a major, multi-year top in the equity markets following the recent volatility”, says Bloomberg. With central banks slowly tightening monetary policy, stocks are bound to suffer, while Gartman is also worried about the “violently random” trading environment of recent months. In short, “it’s time to hold cash; it’s time to sell rallies; it is time not to buy weakness”, as he puts it in The Gartman Letter. “We can trade other things bullishly”, but not equities, and as the markets rally “we shall watch from the sidelines”. We won’t see a repeat of the financial crash of 2008, Gartman tells Fox Business. “But we do need to learn that bubbles happen, and we have to watch when they do.”
The S&P 500 is still trading below its 26 January peak, so it’s certainly possible that we’ve seen the top. But it’s worth noting that Gartman has a penchant for making big headline-grabbing calls, which – as attention-grabbing forecasts have a tendency to do – sometimes come back to bite him. For example, in January 2016 Gartman predicted that the price of a barrel of crude oil wouldn’t trade back above $44 “in my lifetime”. Oil (as measured by the West Texas Intermediate benchmark) now trades at just under $64 a barrel.
Gartman also recently took a hit after investing in hugely volatile stock Riot Blockchain – a biotech firm turned blockchain start-up – despite being a long-term bear on cryptocurrencies. The firm lost a third of its value in mid-February following a CNBC exposé, says Bloomberg. “Lessons have to be learned again and again and again it seems,” said Gartman – “or at least we apparently have to learn them over and over… again.”