Citigroup (NYSE:C) is already up 1.03%, following a sizable gain yesterday, and following four previous days of crashing and burning. Why the sudden change of pace?

Big-bank roundup
First, here's a quick look at what Citi's peers are doing so far today:

Lessons learned the hard way
With yesterday's dramatic turnaround in Citi's fortunes, you might think there was some breaking news. Perhaps a favorable settlement over an investor lawsuit had been reached. Or the superbank had announced an acquisition that was going to significantly boost its revenue or net income.

No. Nothing like that has happened. What happened is, the market got a grip on itself. Last Wednesday, B of A reported first-quarter earnings, missed Wall Street expectations by a hair, and investors panicked. Financials tanked, and it's taken four or five days for things to return to normal.

Certainly, Citi had no reason to tank. It's first-quarter earnings, released Monday, April 14, were impressive. JPMorgan and Wells Fargo had nothing alarming to report in its Q1 earnings (total revenue was down for both, but all the banks are struggling to some degree with that). And even B of A did well, all things considered.

This dramatic plummet and slow climb back to reality for Citi and its peers has really been about investor panic. And, as panics typically go, this one has exhausted itself, and life on the Street is returning to normal. Expect another day share-price appreciation for Citi and the rest of banking's big four.

Look at this as a lesson. Keep an eye on the fundamentals of the companies you're invested in, and ignore the day-to-day, week-to-week, and even month-to-month fluctuations of the market. If you don't think long term, you'll make yourself crazy, like the investors who jumped out of and back into Citi and its peers, all for an earnings miss of two cents. 

Fool contributor John Grgurich owns shares of Citigroup and JPMorgan Chase. Follow John's dispatches from the bleeding heart of capitalism on Twitter @TMFGrgurich.

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