Outlook for US stocks? Ask a 4-year-old: Gartman

The S&P 500's seemingly unstoppable rally has put some investors on edge, but Dennis Gartman's mantra is simple when it comes to U.S. stocks: the trend is your friend.

"It's still a bull market. Sometimes one has to take a simplistic perspective and look at the charts and ask what direction is it moving in? How would a four year old look at this?"

"A four-year-old would look at the chart and say I'm not sure what it is, but it's moving from the lower left to the upper right. We try to look too deeply into things, sometimes it's better to look at what the major trend is. As we make new highs, the trend is still to the upside in equities," he said.
U.S. stocks scaled fresh heights last week, with the S&P rising to a record high of 2,096.99 on Friday as a bounce in oil prices boosted energy shares.

It's been six years into the bull market, and investors are naturally concerned about how long the good times will roll. Dollar strength and weak global economy have been cited as potential stumbling blocks by market bears in recent months.

"Yes, there are reasons to be nervous about it [the rally] and yes there's a likelihood of a correction along the way, but anybody who has tried to sell the stock market has proven to be utterly and completely wrong," he said.
Gartman believes the recent rebound in oil is nothing but a "solid short-covering bounce" and expects prices to re-test lows reached at the end of January.

U.S. crude has risen over 20 percent from the low of $44.08 a barrel it set on January 28. "Crude oil is still being pumped aggressively, and yes rig counts are down, but we're still producing more than we were a mere six months ago," he said.
To trade the abundance of supply, Gartman recommends investing in companies that operate oil tankers.
The Baltic Dry Index, which tracks rates for ships carrying bulk commodities, is at its lowest level in around three decades.
Responding to reports that Apple is making a foray into the automobile space, Gartman says such a move would be overstepping boundaries.

"It's one thing to produce a software (and) hardware, it's entirely another to produce an automobile," he said. On Friday, the Financial Times reported that Apple is recruiting experts in automotive technology and vehicle design to work at a new top-secret research lab.