I guessing that the reaction of the equity markets to the Government’s gradual and methodical takeover of Citigroup isn’t the result they were going for. The writing is on the wall that Citigroup (and most likely all banks) are eventually going to be nationalized (disaster waiting to happen), everybody can see it and yet they continue to stretch the process out. Why not just do it and be done with it, instead of this incremental and systematic takeover? I’m hypothesizing it’s because they want to try and get a positive reaction from investors each time, hoping that the markets recover more ground than they have. We all know the markets can’t go straight down and it’s important that there are ebbs and flows. The fact that the markets remain under pressure should be a sign that the path of least resistance is to the downside.
I’ll continue to state that the direction of the trend is unimportant. What is important is recognizing the trend and trading in allignment with it, just as a surfer rides a wave. Just because a trend is down (as it clearly is) doesn’t make one negative. It makes one a realist.