Hamilton's E-Wave Analysis

C, CitiGroup, Prince Al Waleed bin Talal a.k.a Arabian Warren Buffet

Typically the way the human mind seems to work is that first you make up your mind and only then do you try to find the evidence to prove the point. Particularly if using EW it can be very dangerous to follow this approach as a pattern is a pattern, end of story, pretty mindless but that is how it should work. Let the market, pattern, tell you what is going on and then make your conclusion accordingly

Applying this to Citi Group we should remind ourselves that CitiBank has been in big trouble before  as a result of  REITs, and that at the time (late eighties early nineties), Prince Al Laweed stepped up to the plate and bought a large chunk of Citi at between $2/3. As it happens this turned out to be a very good bet earning the Prince the moniker of Arabian WB. The question now is, will history repeat itself?

Throughout my working life City Bank was not only the largest but also the most aggressive and innovative banking operation in the world, by far. It is hard to believe that this bank will retreat into the background for long. Looking at the long-term chart a reasonable count would be a 9-year a-b- correction, presumable complete as it already reached <$1. Of course Nortel type of action is possible but one would then still expect a half decent rally from the lows. Looking at the short-term chart this is entirely plausible given the pattern. As a minimum a-b-c counter-trend rally should be expected and, so far at least, that may be exactly what we are getting. The first 4th wave is at $9 and then at $20+.  Buying this goes against my own interpretation of the bigger picture, but nevertheless this may just be what the chart is telling us.