On June 22, Citi called the bottom in oil to the day, when in a not too subtly titled note it said “Here Comes The V-Shaped Rebound In Oil.” Since then, both WTI and Brent had risen for 8 trading days in a row, the longest stretch since February 2012. Meanwhile, surprisingly not too many, Gartman went short and, in his latest note, he explained the he remains bearish. End result: the oil rally just closed higher for 9 consecutive days.
Below is the relevant excerpt from Gartman’s latest note, according to which oil bears may want to keep a low profile at least until Gartman does what he does best, and once again succumbs to price momentum.
CRUDE OIL PRICES ARE RATHER BRISKLY HIGHER and we shall continue to view this as nothing more than a much needed, long over-due technical correction in what is and shall continue to be a long term bear market. Supplies are rising; OPEC’s power is diminishing; the US has become the “swing producer” and fracking has only been utilized to any true great extent here in the US but will be exported to Russia, to China, to Africa, to the OPEC nations, to Canada, to Australia et al.
The crude oil bulls are making much of the fact that the rig count, for oil rigs, here in the US fell by 2 last week… the first such decline in nearly 6 months. There are now 756 rigs drilling for oil in the US, but there was one more rig at work in the nat-gas arena than there had been the week previous, so that the total rig count for crude + nat-gas was 940, down from 941. We make much less of this decline than others might, for the simple fact of the matter is that horizontal drilling rigs are far, far more efficient than are regular, single directional rigs. But we shall grant that for the moment, this decline in the rig-count gives those who are long something of a respite. It shall be short lived.
WTI is making its way back toward “The Box” marking the 50-62% retracement of the break that began in late- May and ended… amidst near panic on the part of the crude oil market bulls… ten trading sessions ago. It has been our intention all along to await the opportunity to sell crude oil short on protracted rally and we are getting that rally as we write. We can be patient a while longer.
Gartman may be patient, but the same can hardly be said of bears, who are eagerly waiting for the day bearish Gartman once again throws in the towel.
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