" April 7: "Gartman says reduce exposure to stocks."
Gartman also claimed that reversal days are common, but reversal weeks are rare, and reversal months are rarer still. "It's really, really important we don't get outside reversal months, where you make a new high and close below the previous month."
What he's talking about is that March is known as a so-called outside month, a technical term wherein the S&P for instance and many of the indices established higher highs -- meaning higher highs than the month before -- but broke the previous month's lows and closed below those lows -- meaning lower lows.
This established what technicians call an outside month. This is a technically negative sign.
The proportional part of what he's talking about is right. There's outside reversal days and outside reversal weeks and outside reversal months are the biggest of those negative indicators. The outside reversal month in March has been sustaining the bid in the Gold. Otherwise the Gold would be heading south.
A lot of people besides Gartman have been spooked by this and you hear this all the time on CNBC led by Jim Cramer. Even Cramer is now recommending "lightening up." However he never uses the S-words -- Sell Short. That's verboten.
So why are they doing this? Because the technicals have turned sour. You have an outside reversal month in March followed by the first part of April which has seen the NASDAQ decline since March 2000. This adds to the technical negativity, which implies that the markets are heading south. However you can't infer timing in this event to technical indicators.
What Gartman is correct in saying is that substantial declines have been followed by these technicals. Of course what he won't say since he and others on CNBC are forbidden to use the S-Word and going short since if you did that, you would have made a fortune. They can't say that.
Some reports say that he went 50% to cash and others say he went to 100% -- and you don't know. What he said on CNBC was the most bearish bear-speak that they will allow. The S-Words at the end of that -- sell short -- is verboten.
What you have to infer -- and what the Unwashed who watch CNBC don't understand because they don't understand the limitations that the speakers are being placed under, so they have to talk in code.
So when somebody says they were 100% long on a Monday and then were flat on a Tuesday, what they're actually saying is it's time to get short -- but they're not allowed to say that.
The networks of course place these restrictions because it would be counter what their functions are. Even the commercials that Bloomberg and CNBC run about themselves showing the shills and touts speaking, they pretty much tell you what their job is -- to get the Unwashed buying again. It's to maintain markets at overvalued levels and in order to do that you have to get the Unwashed buying again.
Also everybody has a vested interest in that. Everybody cooperates. It starts in financial media and extends to the Federal Reserve board. You could hear that in the Federal Reserve FOMC minutes which were much more dovish than what people thought it would be. That's what caused the rally on Wednesday because although the Fed says they're not targeting stock prices, in fact they are. Their policies are geared to do just that, although they lie and say they are not.
For the rest of this column, click here -- Al Martin Raw
* AL MARTIN, author of "The Conspirators: Secrets of an Iran Contra Insider," is an Independent Political-Economic Analyst with 25 years of experience as a trader on NYMEX, CME, CBOT and CFTC. He is also currently trading the commodity futures market day and night and has a teleconferencing service to facilitate transactions in the markets. This is a service for independent experienced traders.
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