On Tuesday morning, the Gartman Letter publisher wrote in his newsletter that it might be time to look at shorting oil, and, following his own advice, sold crude in the morning.
“It didn’t feel good for about an hour, and then all of a sudden the bottom fell out,” he said on “Fast Money.”
Brent crude dropped 2.5 percent to $121.70 per barrel. U.S. light, sweet crude slipped 10 cents to $106.46.
Gartman noted that crude fell on a day in which grains, gold and stocks traded higher — “not a good sign for crude.”
Any sign of weakness in the Japanese market — where the government has debt obligations maturing in March — or anywhere else could spell trouble for crude.
“I think if you had the ability to not to look at prices for the next six month and you bought (natural gas) and sold crude, I think you’ll end up seeing natty go higher and crude go higher over the course of six months,” Gartman said. “But you better be on an island not getting newspapers and not getting quotes to make your trade feel awful in the interim.”
Guy Adami of Drakon Capital saw a trading opportunity in Tesoro, which has seen its share price climb along with the price of crude — a trend that could continue as oil prices slip.
“I think Tesoro could easily go back to 22½, 23 if what Dennis says is accurate,” he said.
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Trader disclosure: On Feb. 28, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Gartman is long gold futures; Gartman is short oil futures; McCullough is long (XLU); McCullough is long (GLD); McCullough is short (XLY); Finerman is long (AAPL); Finerman is long (BAC); Finerman is long (JPM); Finerman is long (HPQ); Finerman is long (CMI); Finerman is short (SPY); Finerman is short (MDY); Finerman is short (IWM); Adami is long ( C); Adami is long (GS); Adami is long (INTC); Adami is long (AGU); Adami is long (NUE); Adami is long (MSFT); Adami is long (BTU);
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