FIR 11: Comparing Citi Engine With Fred Flintstone's Engine!!

Financial Investing Radio

Hey, tomorrow (Friday, June 16th) is monthly options expiration day...and there is some federal news at 7:30am CT (building permits) before the open. Always gotta keep mindful of the overall market context.

I'm sure you remember the old cartoon the Flintstones? Sometimes he come up fast to a location and had to stop quick so his feet would scrape along the ground. He never seemed to have foot burns. And, at the end of each episode he'd get locked out of the house, but there was no glass in the windows...I always wondered why he didn't just hop through the window. Anyway! So I'm looking at Citigroup tonight, stock symbol C.

I've got a couple charts here...the Citigroup daily chart...and the Market Effectiveness chart -- which shows how effective the market engine is at moving Citigroup price. When they get mis-alinged then Citigroup can shift gears and the trade can go the other way.

On May 26th there was a gear shift and Citi wandered lower, not by much. But then we got another gear shift, to the upside on June 7th and it has come up a few points since then.

Why do I mention this? Because it's starting to look like a Fred Flinstone screeching to a halt, Citi now appears to be in a potential gear shift that may go down...it is still in the middle of the gear shift, so no move yet...but keep your eye on that.

Now, I want to look at one other thing here...the Futures E-mini contracts. There's a very interesting tell going on here. First there were about 7 good gear shifts in trading the E-minis today. But the interesting point here is that throughout the day as price wandered higher, the market effectiveness chart continued to drop. Hmm..what does that mean?

If price continues to go up, but the market effectiveness is dropping...then some aspects of the market engine were dropping. That means price was rising on a pretty weak foundation. Keep your eye on that tomorrow...certainly it could continue higher...but the probabilities go up that the market engine and the price will need to resolve.

Meaning, either a stronger foundation of players will need to come in and continue to push it up...or, those big players will not come in like Fred Flinstone will come to a screeching halt and the weak foundation will break and price will retreat, bringing the market effectiveness chart and price back into alignment.

If you want to take a closer look at some of the charts I was showing you can find them on my Facebook page at facebook.com/financialinvestingsecrets.

Until next time, keep your eye on the Market Effectiveness chart and trade safe!