Sunday, December 15, 2013

Top 5 Dec 2013 Trades - Dennis Gartman

Top five trades to close out the year.


5. Short U.S. Treasurys
"I want to be short the U.S. bond market," he said on CNBC's "Fast Money." While Gartman said that he had taken off his short position on Monday, he added, "You give me a point and a half rally on the long end, I'm selling the long end of the market."


4. Own metals
"I want to own copper. I want to own steel. I want to own railroads. I want to own ships," Gartman said. "The very basic plumbing of basic economic growth. Old story, it's a good story. It's a been a story that has worked for a long period of time. It's a simple story." The industrials play is a bet on growth, he said, pointing out that China held potential.


"This is a very clear, rational bet on global growth," he said. "No question about that." The underlying assets are attractive, Gartman added.



3. Long the Nikkei

"It's being long of the equities market predicated upon the fact that the Bank of Japan is expanding its reserves even more aggressively than has been the Fed," Gartman said. "It's going to continue. It has no choice. Mr. Abe has three arrows that's he's firing on the economy. The only one that's really working at this point is No. 1, which is to expand reserves."


Noting strength in Japanese equities, Gartman said that it would continue to strengthen. "You can actually be short other markets, but you want to be long the Nikkei," he said.


2. The gold trade
"You want to own gold in yen terms," Gartman said, echoing a trade he has long espoused. "It's been a terrible trade for the last year. It's down 7 percent, but if you've owned gold in dollar terms, you're down 35 percent." Gartman said that one way to own gold in yen terms was to buy, say, GLD, the gold exchange-traded fund and sell an equal amount of a Japanese yen ETF.


Being long the Nikkei, he added, was the same as selling the yen.  "Do one or the other," Gartman said.


1. Playing a currency-cross
Gartman said that his top trade heading into year-end was to short the yen against the Canadian dollar and the British pound, a trade he had been talking about "for months." "Just today, it's started to take off again,"