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The Dennis Gartman Contrarian Oil Trade: Part 2

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The Dennis Gartman Contrarian Oil Trade: Part 2

Earlier this year, Benzinga took a close look at the wide range of predictions market analyst and author of the Gartman Letter, Dennis Gartman, has made about oil prices in the past couple of years.

Gartman’s outlook for oil prices is extremely fluid, often taking a 180-degree turn in a matter of days. Now that WTI crude prices are back above $53/bbl, Benzinga has updated out coverage by adding some of Gartman’s most recent oil calls.

United States Oil Fund LP (ETF) (NYSE: USO) traders should pay particularly close attention to what seems to be a strong contrarian pattern. Each Gartman prediction is followed by the one-month performance of WTI crude immediately following the call.

6/3/2016- Bearish: Gartman said “it’s going to get much worse” for the global oil glut.

One-month return: +0.6 percent

6/23/2016-Bullish: With oil above $49/bbl, Gartman proclaimed “we wish firstly to cover this short position AND we wish to go long of crude oil.”

One-month return: -12.0 percent

7/20/2016-Bearish: Gartman announced it was time to “abandon our modest, oneunit long positions in crude.”

One-month return: +7.8 percent

8/17/2016-Bearish: Gartman said oil bulls “might wish to lighten up on their positions.”

One-month return: -8.0 percent

10/19/2016-Bullish: With oil prices above $51/bbl, Gartman said any correction in oil prices “is to be bought.”

One-month return: -11.4 percent

12/5/2016-Bearish: Just days after OPEC agreed to its first production cut since 2008, Gartman declared oil “isn’t breaking $52.”

One-month return (so far): +3.4 percent

All together, Benzinga has highlighted 19 Gartman oil calls since early 2014. Overall, Gartman has been more bearish than bullish.

The average one-month return in crude prices following Gartman’s six bullish calls is -1.7 percent.

The average one-month return in crude prices following his 13 bearish calls is +7.5 percent.

For the record, back in October, Gartman said that Zero Hedge and other critics of his trading recommendations need to “cut me a break.”

 

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