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Dennis Gartman: Euro Goes Higher, Here’s Why

With one negative development after another roiling Europe, why isn’t the euro dropping like a lead balloon?

”It won’t break 134, it won’t go down much under 134,” notes strategic investor Dennis Gartman, who had been short.

Considering the fundamentals, Gartman was convicned  the euro should be trading at 125 currently – and on its way to parity with the dollar.

But that’s no happening.

And because it’s not happening, Dennis Gartman has had to re-think his position. For the time being, he now says the trade is long.

”It’s the oldest rule in the book. If the news is bearish and market won’t falter you probably have to go to the other side,” Gartman says.

Gartman has a thesis for why the euro doesn’t decline more.

”I can’t help but wonder if money is being repatriated to Europe to take care of the banking circumstances,” he says. “I suspect what’s happening is rather like what happened in the yen when money flowed back to Japan after the problems in Fukushima.”

Although in the long-term, Gartman thinks the financial woes will catch up with the currency – in the near-term Gartman expects gains. “I’m positioned long for a pop,” he says.

Why the Euro Just Won't Break

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Trader disclosure: On Nov. 22, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Terranova is long VRTS; Terranova is long LQD; Terranova is long MUB; Terranova is long AXP; Terranova is long IBM; Terranova is long EMC; Terranova is long SU; Terranova is long HES; Terranova is long AAPL; Terranova is long CSCO; Terranova is long STLD; Terranova is long CNQ; Terranova is long CAT; Terranova is long LULU; Terranova is long SBUX; Cortes is long Treasuries; Cortes is short Gold; Cortes is short Crude; Cortes is short Nasdaq; Cortes is short XRT; Cortes is short DB; Cortes is short BAC; Karabell is long AAPL; Karabell is long MS; Karabell is long ORCL; Karabell is long IBM; Karabell is long GOOG; Karabell is long JOYG; Karabell is long MTW; Dicker owns RIG; Dicker owns ATPG; Dicker owns OXY; Dicker owns EOG; Gartman is long Euro; Gartman is short S&P futures

For Patty Edwards
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Zach Karabell
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Jeff Hirsch
No disclosures

Michael Pachter
I, Michael Pachter, certify that the views expressed in this report accurately reflect my personal opinion and that I have not and will not, directly or indirectly, receive compensation or other payments in connection with my specific (NFLX) recommendations or views contained in this report.

Wedbush makes a market in the securities of NFLX.

Hans Mosesmann
Raymond James & Associates makes a NASDAQ market in shares of Intel Corporation

CNBC.com with wires.