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Dennis Gartman on commodities and currencies
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I admit that I am a fan of Dennis Gartman. I like the way he thinks. He comes off very well when he speaks. Sure I realize that he does tv appearances so he can sell subscriptions to his Gartman Letter. Who isn't in this business to make money. It used to be a rare treat when I would find a video of his on CNBC or Bloomberg tv. However, in the last couple of weeks you can't seem to change the channel without seeing Mr Gartman.
I've tried to pluck through the videos to find a couple of gems. I'll stay away from the 'halftime Fast Money bits' because you'd have to sit through Jeff Macke spout off on something really stupid in each of them.
April 13 - Bloomberg ... he's clearly a big fan of Copper ... and base metals in general ... all are rising ahead of growth ... he calls base metals - copper in particular - a leading indicator of economic growth ... much better than "the data we are getting" ... base metals led on the downside and they are now rising ... they are just as important of a leading indicator as employment is an imporatant lagging indicator
he calls GM bankruptcy a bad sign for the US Dollar ... which flies in the face of what I was talking about yesterday ... he thinks it's bad against the Euro but good against the Yen ... Gartman is long of the Canadian, Australian and New Zealand dollar and short of the Yen
back to April 9 - CNBC ... he's talking commodities ... copper again ... guess he gave CNBC the scoop on Bloomberg ... talks about the Grains ... doesn't like them because of the difference in planting that can happen ... he thinks gold has seen its highs for a while ... likes Copper and Aluminum ... thinks these commodities are indicating that the economy will be turning around in the near future ... likes commodity stocks now - you have to buy them "long before their earnings turn up" ... on Oil - more than ample supplies of oil right now and is going to stay away from energy ... on the economic crisis - they have "staunched the bleeding" which will allow it to heal eventually ... even the bad firms have started to make money - calls out Wells Fargo (oooh, burn)
So let's take a look at what Mr. Gartman is talking about.
Copper - this metal has had a good run up lately, but it looks like it's starting to pull back and will still have a great deal farther to go in the long term. It has bounced off of its 200 dma and may be looking for support at its 50 dma. This may be an opportunity to get into a stock like Freeport McMoran - FCX.
Aluminum - or as the British say, aluminium - this metal appears to be just starting its move. It is still near its 50 dma and has not really run up yet. A stock like Alcoa - AA - will give you plenty of chances to get into it, but as Gartman says, you have to do so long before the earnings growth returns. That appears to be how you play this game
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