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People walk by the New York Stock Exchange, June 24, 2016.

Richard Drew

Dennis Gartman, the veteran investing pundit, said stocks have hit a peak and it's time to hold cash.

In Wednesday's edition of his eponymous newsletter, the economist said he is "calling for a major, multiyear top on the equity markets following the recent volatility and following the reversals to the downside that took place yesterday in the Dow Industrials; the Nasdaq; the S&P and the Russell 2000." He said the forecast represented a "watershed" moment.

Mr. Gartman wrote that stocks will suffer as monetary authorities slowly pull back on stimulus, and he's concerned about a "violently random" trading environment in the past few months and reduced trading volumes. He plans to short equities or stay away from stocks entirely.

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"It is time to hold cash; it is time to sell rallies; it is time not to buy weakness," Mr. Gartman wrote in the note Wednesday. "We can trade other things bullishly, but equities we'll not and as the markets rally this morning we shall watch from the sidelines."

Mr. Gartman has a mixed track record on his recent equity calls. On March 6, Mr. Gartman had said on Bloomberg Television that a market top was made in January -- and indeed, the S&P 500 is still below its Jan. 26 peak. In October, when the S&P 500 was trading in the mid-2500s, he said shares were overpriced; the index is up 7.3 per cent since then.

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