ETF.com: Do you think we're close to the end of this bull market we've been in for eight years?
Gartman: We are; I would counsel people not to be a buyer of equities up here. If you’re an owner of equities, I would counsel strongly to bring stops up behind your positions, buy puts to protect those positions, sell futures to protect those positions, or write covered calls to protect those positions. I would tell you not to be a buyer of new equities. And anything that you had in the past, do something to protect those profits.
ETF.com: Another bull market that seemed to come to an end recently was in the bond market. Bonds sold off sharply last year and interest rates spiked up. Do you think the 30-year run in bonds is over, and will rates continue to head higher?
Gartman: Yes, I do. That 30-plus-year bull market, which began in August 1982, is over. It's hard to believe, but I was there at the beginning. I was there at the end of the previous bear market, and I was there at the beginning of this long, protracted bull market in bonds (or the long, protracted decline in interest rates). It's hard for me to make people remember, but in 1982, the 30-year bond had a coupon of 14.75%, and you couldn't give them away at the time. It was astonishing how bad the psychology was.
But since 1982, we've been in a 30-plus-year bull market; that bull market has ended. The trend is for higher interest rates, not lower. But you must also remember the bond market tends to move in multidecade, long-term trends. If we're in for 20, 30 or 40 years of higher rates, for the first 15 or 20 years, we'll see rates go up very slowly, and very marginally.
It's at the end of this next bear market―the last quarter―that rates will go up the fastest and prices of bonds will fall the most dramatically. So while interest rates are going higher, there's no reason to be panicky about that right now.
ETF.com: In this environment, where stocks are overvalued and bonds go down slowly, are there any assets you like right now?
Gartman: For the first time in a while, I think you should own commodities in general. You should own gold in dollar terms; you should own gold in euro terms; you should own gold in yen-denominated terms. Gold has started to be a bull market.
Also, for the first time in almost four or five years, I'm actually bullish of the crude oil market. Because the term structure had shifted and crude oil prices don't break on bearish news any longer, I'm starting to find myself turning bullish on that commodity.
Contact Sumit Roy at [email protected].