Dennis Gartman Is Bullish on All Things Canadian

Includes: EWC, FXC
by: FP Trading Desk

Dennis Gartman says it's time to turn bullish on all things Canadian. In Wednesday’s edition of The Gartman Letter, he recommended owning the Canadian dollar as opposed to the greenback and Canadian equities relative to U.S. stocks.

Barack Obama’s recent statements on protectionism, which quashed talk of new trade barriers put up by the United States at a time when global trade is already suffering, suggest the beneficiary should be Canada, Mr. Gartman said. This is particularly important given that the President is visiting Canada in two weeks to meet with Prime Minister Harper.

Mr. Gartman wrote:

Over the course of the past several months, it appears to us that some massive top has formed for the US$ and that we would be wise to err upon the side of being long of the C$.

While he has considered this trade for some time, the well-known commentator refrained from acting until until he was sure that there had been very real, credible and technically correct signs. “The President’s comments yesterday were the ‘fundamental’ force needed...”

As far as Mr. Gartman’s decision to err on the side of equities, he considers Canada among the younger, commodity-oriented nations.

Mr. Gartman wrote:

Further still, the political situation in Canada has become less and less confusing, and more and more stable, even as the political pendulum swings quietly to the centre-right there. The fact that Prime Minister Harper was able to force the NDP on the far-left and the Bloc Quebecois on the essentially defunct separatist front to become utterly marginalized was and is a huge step forward. Where only a few months ago it seemed possible that the Bloc + the NDP + the Liberals could put together a minority government capable of ousting Mr. Harper and the Tories, now it is clear that Mr. Harper has very real control of the political situation in Canada as his popularity grows... not violently, but slowly, as is the Canadian way.