[T.S.R:17355] Gartman sees an end to the commodities trade; Cotton, Coffee, Copper & Wheat Will Decline Substantially

Traders often say they don't sound a bell at the top, but if Dennis Gartman could, he'd be up in the belfry right now.  Gartman, who is a widely followed commodity trader and CNBC contributor, thinks a signs are emerging that suggest the commodity bull is running out of gas.

He's first points to plans by Glencore, the world's largest commodity house, to raise as much as $11 billion in an IPO scheduled to price this week.

In case you're not familiar with Glenncore, headquartered in Switzerland, the firm produces, sources, processes, refines, transports, stores, and finances commodities all around the world, according to its website. "Glencore could have gone public almost anytime and it has chosen to go public right now," says Gartman. "I think one has to be very careful being bullish of commodities when Glencore is cashing out. These are among the smartest people in the world."

"If Glencore is getting out, one should be somewhat suspect," Gartman adds

Of course there's another way to look at the IPO. "You can make the argument they're trying to get more capital with which to do a bigger number of trades," admits Gartman. And that would be a bullish commodities. But Gartman sees some other negative signs looming. "Wheat [WCV1  732.00    -4.50  (-0.61%)] isn't making new highs – cotton [CTCV1  151.90    0.75  (+0.5%)] is down 30% from its highs and copper [HGCV1  3.957    -0.0335  (-0.84%)] is breaking down under $4," he says.

In other words, when taken alone the Glencore IPO may not be a sign of the top. But look at it in the context of other bearish catalysts and the path of least resistance is probably lower. "Some of the bloom is off this rose," Gartman says.

And in case you're wondering, it's not just Dennis Gartman who's turning somewhat negative on commodities. Last week Mark Fisher of MBF made a similar call. "The IPO overseas of Glencore bothers me. When the biggest trader in the world IPO's themselves," pay heed.

What do you think? We want to know!

 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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