Gartman: If Market Doesn't Find Support Like In 2010 Or 2011, S&P 1200 Is Possible

In his most recent Gartman Letter, Dennis Gartman discussed the most recent economic data out of the United States and warned of the possibility that a further breakdown in the S&P 500 could lead to an eventual drop to the 1200 level. He also pointed out a recent bullish technical breakout by gold.

S&P Looking For Support

According to Gartman, the S&P 500 needs to quickly find support or there could be major room to the downside. However, as of this moment, there is still hope that the pullback is similar to other pullbacks within this bull market.

“We really, really, really want to believe that the break the markets are suffering through now will be like the breaks in the summer of ’10 and the autumn of ’11 and will find support soon,” he writes. He included the following annotated chart, which includes a red box target danger zone should the S&P not find support soon.

Gold Break-Out

The other chart that Gartman included in his most recent letter is a chart of gold versus the CRB commodity index. Relative to other commodities, gold recently established a major breakout to the upside. “This we find interesting,” Gartman cryptically notes.

Economic Data

As always, Gartman updated readers on the latest important economic data. The latest noteworthy U.S. numbers include surprisingly strong Consumer Confidence numbers from the Conference Board. August’s number of 101.5 was up sharply from July’s number of 90.0 and well above consensus expectations of 83-94.

“We have the suspicion that if the Board were to survey the same consumers this week in light of the collapse in stock prices that the outcome would be enormously different from the report as given,” Gartman added.

In addition, new home sales in July rose 5.4 percent month-over-month, in-line with expectations. In the first half of 2015, new home sales are up 21.2 percent.