Dennis Gartman Says Gold Becoming World's Second Reserve Currency

In his most recent Bloomberg interview, trader, economist, and author of the Gartman Letter, Dennis Gartman has claimed that Gold is becoming the world's second reserve currency behind that of only the US Dollar. He cites that all major currencies are so weak and so people are moving away from paper money and into gold. And, with gold hovering around $1000, things could get interesting. Dennis says the 'trend is up and will likely continue to be up.' Basically, he likes to buy dips here and ride the trend. He had talked gold in a previous interview as well.

He currently says to sell the yen due to the stifled economy and weakness of their administration. There are simply too many problems in Japan and the charts point to that in the Yen. He also likes to watch the EUR/JPY cross as an indicator of markets. When that currency pair has headed south over the past year, the markets trend the same way.

If you're unfamiliar with Gartman, then we suggest you check out his rules of trading so you can get an idea as to his style. We've also covered Gartman's thoughts on the Baltic Dry Index.

Here's the full video interview at Bloomberg.

Charts Galore

Okay, since things have been pretty choppy in the markets lately, I figured we should point out a few charts. Firstly, Steve Puri, as always, has an intriguing chart up of the markets which shows a descending triangle and very bearish implications. We should rally off a test of the recent lows, but the assumption would be that the ensuing rally would fail and make lower highs, setting us up for a big drop. This of course will have to be monitored on a daily basis, but overall the pattern truly is taking shape. You can play a directional breakout of the pattern to either direction should we get one.

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Secondly, Kevin has posted up a chart showing the unbelievable strength in the Japanese Yen (FXY). I have been long the yen for the past few weeks now and it has really exploded as of late. As deleveraging continues, I expect the yen to continue higher as it has recently broken out to multi-year highs. I will be taking profits at each major gap down in the markets, as the yen is trading inversely to the markets currently.

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Lastly, Blain over at Stock Trading To Go has 12 bearish continuation patterns laid out for us in the charts. Here are my three favorites: LDK really has broken down, hitting new all time lows and the pattern as you can see is a sharp descending triangle almost.

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ANR has a channel between $30 and $45, and you can play a breakout in either direction (my guess would obviously be to the downside).

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JRCC has a very similar setup (as do many of the coal names) in that you can play the channel pattern here of $15 to $23. Short on closes below $15 and get long on breakouts above $23.

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Check out the other 9 bearish continuation patterns in FSLR, GOOG, BIDU, MOS, AAPL, YHOO, MEE, NYX, and DRYS that he has laid out here.