Once Hard-Hearted, Dennis Gartman Flirts with Stocks

Monday, 19 Nov 2012 | 5:28 PM ET

TheS&P traded higher on Monday and the Dow surged by triple digits as investors gobbled up stocks, especially those in the energy and materials sectors.

Sentiment improved substantially after week-end comments suggested a deal could be reached to stave off the looming "fiscal cliff," a series of tax and spending changes that will begin to take effect in the new year.

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Gains were significant with Monday's advance marking the biggest percentage gain for stocks since November 6.

Looking at technicals, the S&P edged above its 200-day moving average at around 1,382, a level that had generated strong resistance.

And it's the technical action in the market that has changed the outlook of strategic investor Dennis Gartman.

"I had been quite bearish," admitted Gartman. "But, we had outside reversals on several indexes," he explained. "That is, we've seen new lows and then a close above the previous day's highs in the Dow , Nasdaq and the Russell ."

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Technically speaking that's significant. "You have to pay heed when that happens," he said.

That's not to say Gartman is married to stocks – he's not. But he is willing to flirt for a while.

Considering the S&P fell more than 5% since Election Day, "we could be looking at a 50 point rally in the S&P or 500 points in the Dow," he said.

Trader Pete Najarian largely agrees. He's cheered by the recent strength in financials which Najarian believes is necessary to for the market to march higher. "I'm seeing options traders betting on upside in JPMorgan, BofA, Citi andAIG," he said.

Even the usually bearish Guy Adami thinks the rally has room to run. "If the market can maintain 1375, I think the rally will last 3-4 days."

Posted by CNBC's Lee Brodie

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Trader disclosure: On November 19, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is long RLGY; Karen Finerman is long MHP; Karen Finerman is long FL; Karen Finerman is short SPY; Karen Finerman is short MDY; Pete Najarian is long AAPL; Pete Najarian is long BAC; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long MSFT; Pete Najarian is long MRK; Pete Najarian is long INTC; Anthony Scaramucci is long AAPL; Anthony Scaramucci is long BAC; Anthony Scaramucci is long GS; Anthony Scaramucci is long FB; Anthony Scaramucci is long GOOG; Scott Nations is long BAC; Scott Nations is long BAC CALLS; Scott Nations is long SPY; Scott Nations is long S&P VOLATILITY

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