George Soros is one of the greatest investors and market speculators of our time with net worth of over 24 billion dollars. He is notoriously known for the “spectacular attack” against the Pound Sterling, which his Quantum Fund did in 1992. Recently Soros sold all his shares in Citigroup Inc., J.P. Morgan Chase & Co. and Bank of America. If the banking sector crashes soon, you can bet that many will blame him for the catastrophe. But would it be his fault really?
If you are familiar with what we are doing, you probably know that in our opinion no-one can control the market. This means that no-one causes it to rise and no-one causes it to crash, including George Soros. If you think it through, you will realize, that when the market is rallying nobody says “Soros bought, that is the reason”, but when the market crashes, they say “Soros sold, that is the reason”. And this makes perfect sense to the majority of people. Strange isn’t it? That is because during bad times, people need a scapegoat and usually it is someone successful.
We do not know what methods of analysis Soros is using, but in order to make 24 billion $, they must be pretty good. This is the first part of a three-article series, in which we will use the Elliott Wave Principle to analyze the charts of the three stocks Soros sold. In this first chapter we will examine Citigroup Inc. A weekly chart is given below.
As you can see, Citigroup took a hard hit during the 2007-2009 stock market crash. Its stock price fell from 567$ to only 15$ in five waves, labeled A. According to the theory, after every five waves, a correction follows. In our case it is a shallow a-b-c zig-zag in wave B, which seems to have finished with a top at 55.40. So, the chart of Citigroup Inc. depicts a classical 5-3 Elliott Wave cycle, after which we would normally expect another sell-off. This conclusion coincides with Soros’ bearish opinion. Only time will tell, whether he is right or not, but if it turns out that he was, do not blame him for the crash.
Images by www.theblaze.com
Sources: www.intellihub.com
