The stock market is on a tear this morning on the heels of a statement by CEO Pandit that Citigroup Has A Profit for the first two months of 2009.

In a letter sent to employees Monday, Citi Chief Executive Vikram 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 have been that would at least partially offset profit.

So Citigroup has a profit, excluding what?

Who knows? Pandit did not say.

In other news, I am announcing I have $10 billion in my bank account except for the portion of the $10 billion I do not have.

Bear in mind the market is not rallying because of this nonsense. The market is 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.

$SPX Weekly Chart

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People have been asking for an update of the E-Wave count I have been following. The last update I offered was on January 9, 2009 in S&P; 500 Crash Count – Wave Four Triangle.

On October 28, 2008 in S&P; 500 Crash Count – Wave 3 Update I posted this interpretation of what might happen.

$SPX Monthly Chart

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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 is the case and wave 5 does not extend, it will not be fun to be net short at this point whether or not lower lows are ultimately coming later or not.

For now, let’s party like we have profits, whether we do or not.

Mike “Mish” Shedlock
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