$hitibank says expect a 20 percent drop in the stock market

[marmar]

Citi sees up to 20% correction over Greece
Strategists say investors should avoid a fire sale, caution on euro weakness

By Barbara Kollmeyer, MarketWatch


MADRID (MarketWatch) -- Just hours after one of the most bruising sessions for Wall Street, strategists in Europe on Friday painted a poor outlook for rebound prospects in the near term.

Citigroup got things off to a bearish start with a prediction that fears of sovereign debt contagion over Greece could trigger a near-term correction of up to 20%.

They said that while there have been financial crises with international implications in the recent past -- Northern Europe in 1992, Southeast Asia and South Korea in 1997 -- the Greek crisis is "graver than these were."

Global stock markets have perhaps rallied too far, too fast since the March low of 2009 to the April 2010 high, Tsutomu Fujita, an analyst at Citi, commented.

"With global equities having rallied 79.9% in a scant 13 months through April, we feel it would be only natural to go through a correction of around 10% or 20% over two or three months," Fujita wrote in a research note. .........(more)

The complete piece is at: http://www.marketwatch.com/story/citi-sees-up-to-20-correction-over-greece-2010-05-07

[Statistical]

1. Hedge yourself neutral.

Short crappy companies, long the good ones. Using options is easier than shorting directly.

The premise is that in any fall the shit falls faster.
In sideways market we see a flight to safety.