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Interesting thoughts (surprisingly) from Citi

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21

December 22, 2010 – Comments (7)

Check out this post at TPC

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IF PAST IS PROLOGUE….
22 December 2010 by TPC

http://pragcap.com/if-past-is-prologue

    Bottom line: Our favourite overlays suggest for the DJIA.

        * The peak may be posted as early as the opening days of January 2011 (possibly even 3rd January as per the other 3 examples) with a down month in the region of 5%.

        * We will see an intra year bear market next year (fall of over 20%).

        * We will close the year down double digit percentages (Plus/minus 16% down).

        * We could be waiting a further 6 to 8 years to eventually see the DJIA regain the 2007 highs on a yearly close basis.

    What will the catalyst be???

    Our bias is likely 1 of 2 things.

        * The bond market falling sharply as it did in 1977 sending yields higher and fuelling inflation or supply fears or both.
        * Europe imploding. While this could stress our view on the dollar fixed income and commodities, this dynamic still supports our bearish equity view.


7 Comments – Post Your Own

#1) On December 22, 2010 at 9:48 AM, MoneyWorksforMe (< 20) wrote:

Wow...very surprised this is coming from Citi. They just regained one ounce of respect from me--not simply because I agree with them, but instead because posting a report like this took some balls, particularly with bullish sentiment as high as it is today...

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#2) On December 22, 2010 at 10:04 AM, mtf00l (47.14) wrote:

Any one know what their angle is?...

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#3) On December 22, 2010 at 1:55 PM, outoffocus (23.17) wrote:

Bragging rights maybe?

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#4) On December 22, 2010 at 1:55 PM, outoffocus (23.17) wrote:

Or Citi could be shorting bonds right now.

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#5) On December 22, 2010 at 5:45 PM, totallyoblivious (30.24) wrote:

I'm not sure I believe it'll take 12 years to reach the pre-crash peak again, but I do believe that the first week of January has some major potential for a pullback.  I also agree that 2011 will probably be a year for the bears.

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#6) On December 22, 2010 at 6:01 PM, rexlove (99.54) wrote:

Interesting binve. Although I would never trade on this. As with most things in the stock market - past performance almost never guarantees future returns.

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#7) On December 22, 2010 at 10:06 PM, binve (< 20) wrote:

MoneyWorksforMe ,

Totally agreed. A lot of bullishness right now (see http://marketthoughtsandanalysis.blogspot.com/2010/12/bullishness-wow.html, so it is welcome to see a bit of contrarian analysis from a historically bullish company

mtf00l ,

nope

outoffocus,

I suspect the latter.

totallyoblivious,

agreed.

rexlove ,

That is very true :).

ziba963 ,

ce,ed hardy t-shirt! for $15!? sign me up!!. yeah spam!!!.

 

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