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Gartman: 'The Most Important Stocks Are Broken'

A few of the big commodity-related names have terrible charts. Find out from Dennis Gartman what you must know, before you place your next trade!

Inflection Point

Gartman is closely watching the action in Freeport McMoRan , US Steel , and ArcelorMittal as 'tells.'

”The most important stocks, the one’s that go into the making of automobiles and the making of refrigerators have all been broken,” he says. “That tells us a lot about the dollar. It’s getting strong and that’s putting downward pressure on commodities.”

As a result, "I find myself selling stocks that are dependent upon higher commodities prices and buying stocks that are dependent upon lower commodities prices," -- restaurants for example.

Oil

But it’s not just technical action in key metals stocks that has Gartman concerned. He’s also watching oil and he’s worried.

I’m a buyer of Suncor and a seller of crude oil against it, reveals Gartman. If you’re going to own an oil company I think Suncor is the one to own.

However, the contango in crude is very high. And when the contango is high I err upon the side of being a seller.

Gartman Letter Preview

Another bearish factor for stocks is the action in the euro, Gartman says. “I think the euro has a long way to go down. That’s a problem that’s going to get worse. I’d be a buyer of non-Us dollars and sell Europe against it.”

Dennis tells Fast Money he'll expand upon that them in Thrusday's Gartman Letter.


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Trader disclosure: On February 3rd, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (BTU), (GS), (INTC), (MSFT), (NUE); Kaminsky Owns (LULU) June Puts; Pete Najarian Owns (AAPL) Call Spread; Pete Najarian Owns (AKAM) Call Spread; Pete Najarian Owns (INTC) Calls; Pete Najarian Owns (MGM) Call Spread; Pete Najarian Owns (MS), Is Short (MS) Calls; Pete Najarian Owns (QCOM) Call Spread; Pete Najarian Owns (X) Call Spread; Pete Najarian Owns (XLF) Calls; Pete Najarian Owns (YUM) Call Spread; Terranova Owns (BAC), (JPM), (OIH), (FCX), (GOOG), (EMC), (AAPL), (DELL), (MSFT), (QCOM)

For Joe Terranova:
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Dennis Gartman:
Funds Managed By Gartman Own (SU), Are Short Crude Oil
Funds Managed By Gartman Are Long Australian Dollars, Canadian Dollars; Are Short Euro, Yen, British Pound Sterling
Funds Managed By Gartman Own Gold Futures, (GLD); Are Short British Pound Sterling
Funds Managed By Gartman Own (DRI), (PNRA), (BWLD)
Funds Managed By Gartman Are Short (MT), (NUE)
Funds Managed By Gartman Are Short (MOS)

For Paul Latta:
Latta Owns (SBUX)

Other Relevant Disclosures:
Jon Najarian Owned (KCI) Today

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