Correction Call: Gartman Joins Prechter and Soros (GLD, QQQQ, SPY, PG)

The Gartman Letter has been a key technical advisory service for years and years and has become one of the benchmark technical reports.  We have already heard both billionaire George Soros and then Robert Prechter of Elliott Wave call gold a serious bubble.  Here we watch the SPDR Gold Trust (NYSE: GLD) rather than spot gold because of an ease of trading for investors.  and we have already heard Robert Prechter say in the last two weeks in his newsletter that this was “perhaps the last chance to get out of stocks with the DJIA in quintuple digits.” This echoes what our affiliate Adam Hewison said about the NASDAQ heading down to 1,800 or worse and we follow that via the PowerShares QQQ (NASDAQ: QQQQ).  Last night we saw Dennis Gartman jump in on throwing the towel on the stock market.

Gartman said on FAST MONEY on CNBC that he hates to make the correction call.  Gartman may hate saying it, but he just joined the big sell-off camp.  He noted as far as a correction of more than 10%, “I think we are in for a lot more than a 10% correction….” and he called a “turndown in economic activity” which he called disconcerting.

As far as what to look at, he noted that Procter & Gamble (NYSE: PG) may not get hit, and maybe the restaurants.  We have already seen the S&P 500 Index via the SDPR (NYSE: SPY) get hit by 8.1% from the highs.  It did not exactly sound like Dennis Gartman just meant a 10% correction and a bit more… He’s looking for much more.

Gartman also noted that this will start doing damage to tech very soon…. that plays right into the downside of the PowerShares QQQ (NASDAQ: QQQQ) that Adam Hewison was hitting.

Yesterday I gave crash-proofing and crash-profiteering trades on OptionsZone.com, which is something that will scale with each corresponding lower strike price as long as the market doesn’t make too far of a move and in a manner that is too fast.

Have a good trading day, whether you are bullish or bearish.  Gartman’s discussion from CNBC last night should be visible here in full.

We always have a caveat here on pure technicians who only use charts.  It is the same warning on pure fundamentalists who do not heed charts.  These calls can be right many times, and when they are not they are often very wrong at the turn.  Our own take here is that the fundamentals in the markets have changed significantly in recent weeks.  The charts are getting weaker and at least those charts have busted out of being in any continued upward-momentum in the last 10 trading days.  The headlines out of Washington D.C. will all play into the fundamentals in the days and weeks ahead, as will what develops in Europe in Asia.

JON C. OGG