Citi Incites Stampede
Is this a bear-market rally, or something more?
The stock market is on a tear this morning on the heels of a statement by CEO Vikram Pandit that Citigroup (C) has a profit for the first 2 months of 2009.
In a letter sent to employees Monday, Pandit said the first-quarter performance so far has been the bank's best since the third quarter of 2007 - the last time it recorded net income for a full period. Based on historical revenue and expense rates, Citi's projected earnings before taxes and one-time charges would be about $8.3 billion for the full quarter.
Pandit declined to say how large credit losses and other one-time items that would at least partially offset profit, have been.
So Citigroup has a profit, excluding what? Pandit didn't say.
In other news, I'm announcing that I have $10 billion in my bank account, except for the portion of the $10 billion I don't have.
Bear in mind - the market isn't rallying because of this nonsense. It's rallying because at a minimum, it was technically very oversold and was ready to rally. Furthermore, this rally has the potential to be much stronger than most think.
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People have been asking for an update of the E-Wave count I've been following. The last update I offered was on January 9, 2009 in S&P 500 Crash Count - Wave 4 Triangle.
On October 28, 2008 in S&P 500 Crash Count - Wave 3 Update I posted this interpretation of what might happen.
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The above idea worked pretty well. Moreover, it now appears as if the S&P 500 has traced out 5 clean waves down, ending at 666. If that's the case, and wave 5 doesn't extend, it won't be fun to be net short at this point - whether lower lows are ultimately coming later or not.
For now, let's party like we have profits - whether we do or don't.
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