Documente Academic
Documente Profesional
Documente Cultură
That does not mean, however, that the Fed shall not
use next week to tell the markets that at some point in
the future it will begin to reduce the sums of money it
has injected into the system through normal maturity of
Treasury securities it holds and through outright sales
of such securities. The Fed has quite obviously been
adding to its holdings of treasuries in a very real and
very dramatic fashion since last September when the
banking crisis really broke, and we have applauded the
Fed for its timely and aggressive actions. We have also
defended the Fed from those taking it to task for being
too “inflationary,” for it had no choice but to do what it for the Recession’s end. We are prepared to shout;
did… to flood the system with liquidity… in order to but not quite yet:
stave off a true collapse…a true seizing-up… of the
banking system. Dr. Bernanke’s doctoral dissertation 06/19 06/18
was on the Depression, and he was going to make Mkt Current Prev US$ Change
¥ 97.10 95.65 + 1.45 Yen
certain that nothing such as that was going to develop € 1.3889 1.3939 + .50 Cents
on his watch. The question is when shall the Fed CHf 1.0885 1.0775 + 1.10 Centimes
begin removing that liquidity and we may see some £ 1.6370 1.6295 - .75 Pence
C$ 1.1295 1.1345 - .50 Cents
discussion of that in next week’s communiqué. More A$ .8040 .7930 - 1.10 Cents
likely we’ll see it in the communiqué at the next NZ$ .6395 .6330 - .65 Cents
meeting and not this one, but we’ll not be surprised to Peso 13.39 13.44 - .05 Centavos
Braz Rl 1.9750 1.9645 + 1.05 Centavos
see some modest shift in the language of this Ruble 31.16 31.16 unch Rubles
meeting’s communiqué… some hint that tighter days Yuan 6.8320 6.8295 + .25 Renminbi
rather than easier lie ahead. But again, the real shift is Prices "marked" at 10:00 GMT
some long while off into the future.
The Canadian dollar is firmer on the cross relative to
the Yen and even relative to the US dollar as it is now
Regarding the economic data yesterday, we note that
quite evident that the rumoured no-confidence vote by
the “Leading” Economic Indicators rose in May by
the Liberals and the centre-Left in Parliament in Ottawa
1.2%, the second month in a row that it has risen, for it
will not take place. Simply put, it now appears that the
rose 1.1% in April. Of greater interest to us, however is
notion of bringing the current centre-right, minority Tory
that the Ratio of the Coincident to Lagging Indicators
government down via a vote of no-confidence on a
was unchanged from the previous month as both the
minor point of legislation was nothing more than a
“Coincident” and the “Lagging” indictors fell by the
publicity stunt by the leader of the Liberals there to
same 0.2% The Ratio was effectively unchanged the
embolden the party loyalists
previous month also, standing
and to help raise funds for
presently at .899:1: As is
an eventual election.
evident from the chart of the
However, to have tried to
Ratio at the bottom left of p.1,
force an election now, when
the Ratio is trying to turn for
the party’s coffers are all but
the better, and has been for
empty and when party
the past several months, but
enthusiasm is even emptier
only by the very barest of
would be political suicide.
margins. But a turn is a turn,
Mr. Ignatieff, the leader of
and we are paying this heed
the Liberal Party nationally
as evidence that the
may be center-left politically
recession is very nearly
and philosophically, but he
coming to an end.
is not an idiot. He knew that an election now would be
useless and perhaps even damaging, but floating the
That is more and more possible in light of the slightly
idea helped to raise funds and to raise the party’s
better jobless claims data of the last several weeks.
public perception. In the end, however, it was much
Although Claims have not “spiked” lower, they’ve been
ado about very little… and hence the non-interest on
trending lower since late February, with the four week
the part of the very vast majority of Canadian citizens.
moving average of new claims now clearly moving
The general perception on the part of Canada’s voters
“from the upper left to the lower right” over the course
of the rumoured call to bring the government down was
of the past three months. We’d like to see claims
“O, that crazy Iggy is at it again. How sweet; how cute?
“spike” downward below 600 thousand sometime in the
How utterly uninteresting.”
next two or three or four weeks, for if they did, along
with the “turn” in the Ratio of Coincident to Lagging
Indicators, we’d raise high the roof beams with our call
COMMODITY PRICES ARE STABLE was in the 70’s and 80’s THE Voice of the grain
market. His surveys were the other voice on grain
with energy prices holding steady; with base metals
production outside of the USDA. When Conrad spoke
holding steady to slightly weaker; with the precious
on the grains we… and everyone else… listened.
metals steady and with the grains having weakened a
Those who did not paid dearly for their ill advised
bit yesterday but rallying a bit this morning.
decision. He wrote earlier this week to say the
following:
Regarding the grains, the weakness of the past week
and one half...coincident perfectly with the stronger US
Dear Dennis:
dollar...does seem to us to have found support along
some rather well defined trend lines. Corn and My sixty years of watching the grain futures
soybeans have held, and although we bought wheat markets have forged the following four trading
earlier this week and were stopped out yesterday (with rules:
a very minor loss, but a loss nonetheless) even the 1. Don't be long when the crops are growing
wheat chart seems reasonably, long term bullish to us. larger.
Perhaps we are trying to “see” something bullish when
2. Don't be short when the crops are becoming
there really is nothing to be seen; but the recent smaller.
weakness in corn that took July corn to and just under
$4.00/bushel looks uncommonly similar to the break 3. Rain makes grain.
back in early April that took corn from $4.20 to $3.70 4. During the growing season, on average, it is
where support “lived,” and to the break in January- usually prudent to expect normal US weather
early March when corn fell from $4.20 to $3.55. The developments. Also, normal U.S. crop
lows are progressively higher, and so too the highs. productions.
Until last Thursday, we’d been holding our positions, unwilling to Short: We own SDS and are also short of the S&P futures to
reduce them, but also unwilling to add to them. Then, we bought the hedge our long positions, along with S&P and NASDAQ futures. We
Canadian and the Australian dollars while selling the Yen, bringing are also short of Treasuries at the long end of the curve.
our position to ten units of the cross. This was hard to do, but as one
of our trading mentors, Peter Stadelmeyer on the CBOT always used We hold a number of “paired” trades such as long of ANDE and K
to say, “Do the hard trade.” We did it upon receipt of this (we tossed BG over-board yesterday) while short of ADM; long of
commentary and our doing of it proved reasonably wise. PBR and SU while short of XOM and CVX; and long of GS, L and
BX while short of BRK.B. Recently, these trades have moved
against us, and we’ll wait to see them turn back in our favour before
2. Long of Three Units of “Prosaic, Old-Guard, adding to them again.
and dividend paying” equities/ Short of Three
Units of the Broad Market to hedge the trade: In our retirement and personal trading accounts
This morning, we want more exposure rather than less to steel, here, we are up 8.8% for the year-to-date. The S&P is
aluminium, copper et al. higher for the year by1.7%. In a sustained equity bull market we’ll lag
the S&P for we are rarely aggressively net long… or net short, for
that matter… and when we are it is only very modestly so. Last year,
3. Long of One Unit each of Australian when the global markets were down 35-40% we were down very low
and Brazilian equities; short One Unit single digits, but as the saying goes, “You can’t eat relative
performance!”
Each of French and German equities: As
noted here yesterday, we see the correction in equities globally as
The following is not a recommendation, a solicitation or an offer to
an opportunity to buy into the equities of nations that produce
commodities while selling those that import them. We’ve bought sell the securities and reflects publicly available pricing information
Australia and Brazil and we’ve sold Europe, doing so by owning provided for informational purposes only.
EWA and EWZ, the Australian and Brazilian ETFs respectively, and
by selling short EWQ and EWG, the ETF for France and Germany.
CIBC Gartman Global Allocation Deposit Notes Series 1-4;
The Gartman Index: 108.82 vs. 108.85 previously; and
It is difficult, if not impossible, to borrow EWQ and EWG, and so
we’ve no choice but to suggest selling a smorgasbord of German The Gartman Index II: 87.87 vs. 87.89 previously.
and French equities where available, or to sell the futures contracts.
Retail may find that impossible; institutions will not. We’ll give this Horizons AlphaPro Gartman Fund (TSX: HAG.UN):
trade a bit of room, but we’re not willing to see the BOVESPA in Yesterday’s Closing Price: 9.80 vs. 9.95
Brazil and the SP ASX 200 in Sydney lose more than 2% relative to Yesterday’s NAV per Class A Unit: $9.1141 vs. 9.1304
the EUR STOXX 600 Index. So far we’re safe Yesterday’s NAV per Class F Unit: $9.3744 vs. $9.3959
4. Long of One Unit of Gold: We bought one unit The Gartman Letter L.C. serves as a sub adviser to the above
of gold at the market earlier this week, and our stop shall be just mentioned products. Investors in the CIBC Gartman Global
below the recent low in spot gold. That was $930 and so we’ll give Allocation Deposit Notes should go to
the trade to $928… and it must trade below there for an hour or so http://www.cibcppn.com/ScreensCA/canproductsearch.aspx?QS=gar
before we’ll act. tman&PC=0&NN=&MDRS=&MDRE=&IDRS=&IDRE=&ADP=&FC=&
ADV=False for more information. Existing investors in HAG.UN
We do not care whether one buys gold stocks, or gold futures or the should go to http://www.hapetfs.com/gartman_cf.asp for more
gold ETF (although our own preference is for the latter). Our only information.
wish is to own gold and we’ll use spot gold as our reference point
from this point on. Our stop, therefore, is in terms of spot gold, and
our client should adjust their trading/thinking accordingly Good Luck and Good Trading, Dennis Gartman
5. Short of Two Units of the Disclaimer: This Publication is protected by U.S. and International Copyright laws. All rights
Long End of the US Bond reserved. No license is granted to the user except for the user's personal use. No part of this
market: We sold the long end of the yield publication or its contents may be copied, downloaded, stored in a retrieval system, further
curve here in the US yesterday upon receipt of transmitted, or otherwise reproduced, stored, disseminated, transferred, or used, in any form or
this commentary. As we wrote the Sep t-notes by any means, except as permitted under The Gartman Letter subscription agreement or with
were trading 115.01 and we said we’d “take” prior written permission. This publication is proprietary and limited to the sole use of The
anything better than 114.28. Clearly that was Gartman Letter, L.C. clients. Each reproduction of any part of this publication or its contents
possible. Further, we said we’d add to the trade must contain notice of The Gartman Letter, L.C.'s copyright. Pursuant to U.S. Copyright law,
should Sep. T-notes trade below 114 ½, and
they did… early in the day. damages for liability or infringing a copyright may amount to $30,000 per infringement and, in the
case of wilful infringement; the amount may be up to $150,000 per infringement, in addition to
Those who cannot trade futures were told to the recovery of costs and attorneys' fees. The information contained herein is not necessarily
either sell short the TLT or buy the “double complete and its accuracy is not guaranteed by The Gartman Letter, L.C., its operating entity or
reverse” ETF, TBT. As a stop, we’ll not want to the principals therein. If you have received this communication in error, please notify us
see the Sep. futures trade and close above 115 immediately by electronic mail or Telephone. Neither the information, nor any opinion expressed
¾’s, down from 116.00. constitutes a solicitation for the purchase of any future or security referred to in The Gartman
Letter.Any further disclosure or use, distribution, dissemination or copying of this message or any
We were stopped out of our position in wheat attachment is strictly prohibited; such information, whether derived from The Gartman Letter LC
yesterday for a very small loss, but a loss or from any oral or written communication by way of opinion, advice, or otherwise with a principal
nonetheless. We may revisit this trade sooner of the company is not warranted in any manner whatsoever, is for the use of our customers only
rather than later but for now we are out. Those and may be obtained from internal and external research sources considered to be reliable.
not out should exit immediately.
Principals of The Gartman Letter L.C. may or may not hold or be short of securities discussed
herein, or of any other securities, at any time. The foregoing also expressly applies to any trial
subscription. And anyone who says otherwise is itchin' for a fight.