A number of years ago I lived in Chicago, it was during Michael Jordan's NBA reign. We would buy the standing room only tickets in the old Chicago stadium and go watch him play. When he would get into the open court with the ball he'd leave earth at the top of the key and start floating...you could see his tongue sticking out all the way up where we were standing!! That was some fun basketball.

It was pretty easy to measure his effectiveness, # points made, # assists and passes, # blocks, and so on.

I had a similar desire with investing and trading...I wanted to understand how effective the market was at moving price of a particular instrument, like a stock or a future.

And even more important to that, I wanted to know when the market was being INEFFECTIVE at moving the stock or the future. I learned that this represented an opportunity, it was the moment to take notice and look for opportunities.

I believe that knowing the effectiveness and the moments of ineffectiveness of a market gives you freedom. You are able to focus on other things and you know when to start giving attention to a particular instrument.

The "market" is more than just what price something is being traded at a particular moment. The price is an outcome of the market's behavior and context. Why does price move? I sound like my economics professor in college!! There's supply and demand, there's number of participants, there's timing, there's world events, there's number of transactions, and so on. The effect of that effort, or rather, the effect of that market is the impact on price and its movement.

I'm certainly no basketball expert, but I'd guess that even Mr Jordan would not be as effective if he were playing a game if he were sick.

If number of participants decreases, and the amount of their buying or selling also decreases, and some news also comes into a market, there can be less tension and price may move more quickly as it looks to resolve buyers and sellers demands.

Let's look at the E-minis, there are two charts here, one that shows market effectiveness, and the other that shows price. You can see bias on the effectiveness chart, and the effect on the price, namely, the higher probability trade locations.

Go to financialinvestingradio.com, look for the Podcast Charts & Video section and in there find FIR #19. There will be some links for two charts there. Open them both up.

As you look at the opening on the Mkt Effectiveness chart up to point A "gear shift", you can see that the market was being effective for the bulls as the bars continue to rise. The challenge at point A on the trading is that it is really messy. So in these cases I ask two questions: 1. what is the market effectiveness chart telling me? bullish 2. where is the market structure...I need to see a trend line break?

The point "B" gear shift occurred when price was falling, see point B on the trade chart, but the market effectiveness chart was continuing up. In this case there is better structure. So a cool trick to use is to wait for the market to align and go with that direction. And that is what point B2 is showing. Basically point B1 is saying that price is falling, but that is mis-aligned with where the market engine is trying to go. On point B2 the red line on the market effectiveness chart comes to the top...meaning the market engine elements and price are aligned. There's the high probability trade.

That's where Jordan dunks the ball!!

On gear shift "C1" it was back to unclear market structure, the market engine indicator (green line) on the trading chart was definitely trending down.

So, only trade the gear shifts when you have good structure and alignment.

We get that signal on D1 and D2... In this case the D1 gear shift is a deep one, and at the point of D2, the market's engine elements and price had aligned...this baby is going down.

Take a moment to draw lines on the other gear shifts and look at what price was doing, how would you know which direction to trade?

For my birthday one year my brother gave me a life-size cut-out of Mr Jordan...I was able to keep it in the front room for a while, until it scared my wife one day, thinking someone was standing there.

Oh well...let's do some of our own high probability shots with the market effectiveness chart and engine.

Until next time, Trade Safe!

My Dad was quite the gardener, he grew many things including some lemon and lime trees. At one point I lived in an area where there were orange trees; one day we pulled along side the road and found some trees, not on anyone's property that we could tell...and they were loaded with oranges. Wow...we thought...there are tons of them just ripe for the picking. We picked a few and got into the car, excited about our discovery. As we took a bite we discovered they were very bitter, and were not oranges. Some things are not what they seem.

Netflix can be that way...it has a lot of volatility and requires a steady hand. The safest gear shift I have found with NFLX is on the Composite Index. Go to financialinvestingsecret.com and in the Podcast Charts & Video section go to FIR # 18. On the Market Effectiveness chart I have only included the gear shift for the composite index. NFLX comes out of alignment alot with the Nasdaq futures engine and gives me too many choppy signals.

Doing this reduces the number of signals, but makes them more highly probable.

Another key thing to note is the nature of the Market Engine Indicator patterns on the NASDAQ engine. In this podcast I introduce a very simple pattern, which is a trend line break on that indicator. Let's take a look at three trade opportunities.

*** Trade Opportunity 1 1. Market Effectiveness Chart: gear shift [Feb 23] 2. Trading Chart: Market Engine Indicator Pattern - Divergence/Trend Line break [Feb 23] 3. Trading Chart: Market Engine Confirmation Lines - Yellow & Red [Feb 28]

*** Trade Opportunity 2 1. Market Effectiveness Chart: gear shift [Mar 3] 2. Trading Chart: Market Engine Indicator Pattern - Half Back [Mar 10] 3. Trading Chart: Market Engine Confirmation Lines - Yellow and Green [Mar 13]

*** Trade Opportunity 3 1. Market Effectiveness Chart: gear shift [Apr 21] 2. Trading Chart: Market Engine Indicator Pattern - Trend [Apr 24] 3. Trading Chart: Market Engine Confirmation Lines - Yellow and Green [Apr 24]

An interesting pattern with NFLX is that the initial gear shifts are about 5 to 6 weeks apart. Just saying.

Be careful with this one, it's a volatile ride; there are many other investing opportunities that are safer to ride than this one.

Watch out for those fruits that aren't easy to eat!!

That's it for now...until next time...Trade Safe!

I was on a flight many years ago and noticed the guy sitting next to me had San Francisco 49er paperwork. I was doing my work and finally they brought some food out. I hadn't looked closely at the guy up until that point...but finally I said, "What kind of work do you do?". He said, "I manage the San Francisco 49ers." I turned and looked at him closely and realized it was Dwight Clark, the famous dude who made THE CATCH!!

We had an awesome chat about football, including my illustrious single year career in little league!! San Francisco had practiced that play many times and knew the right time to execute...the setup was to use it late in the game as people were getting tired. Some think Montana was throwing the ball away...I'm not here to debate that.

But, with trading and investing we have to know the plays, practice them, and know when to execute them. We need to get to know a specific stock and its behaviors.

When we looked at Walmart the flow of signals typically went:

1. Market Effectiveness Chart: gear shift 2. Trading Chart: Market Engine Indicator Pattern 3. Trading Chart: Market Engine Confirmation Lines

But for AAPL, that is not the case. This is largely because it plays such a significant role in its index and the NASDAQ engine. So, we need more flexibility in expectation of the order.

In some cases the Market Effectiveness chart signal will come after the Market Engine Indicator Pattern and also the Market Engine Confirmation Lines.

Let's take a look at some of the trade signals over the past few months.

*** Trade Opportunity 1 1. Market Effectiveness Chart: gear shift [April 28] 2. Trading Chart: Market Engine Indicator Pattern - Divergence in this case [May 1] NONE 3. Trading Chart: Market Engine Confirmation Lines

*** Trade Opportunity 2 1. Market Effectiveness Chart: gear shift [May 2] 2. Trading Chart: Market Engine Indicator Pattern - Half Back [May 5] 3. Trading Chart: Market Engine Confirmation Lines - Yellow and Green [May 5]

*** Trade Opportunity 3 1. Market Effectiveness Chart: gear shift [May 12] 2. Trading Chart: Market Engine Indicator Pattern - Divergence [May 16] 3. Trading Chart: Market Engine Confirmation Lines - Yellow and Red [May 17]

*** Trade Opportunity 4 1. Trading Chart: Market Engine Indicator Pattern - Divergence [May 18] 2. Trading Chart: Market Engine Confirmation Lines - Yellow and Green [May 19] 3. Market Effectiveness Chart: gear shift [May 26]

*** Trade Opportunity 5 1. Market Effectiveness Chart: gear shift [Jun 8] 2. Trading Chart: Market Engine Indicator Pattern - Half Back/Divergence [Jun 9] 3. Trading Chart: Market Engine Confirmation Lines - Yellow and Green [Jun 9]

*** Trade Opportunity 6 Half Back??

Thanks for joining...and until next time...Trade Safe!

I weighed in at 66 pounds when I played little league football as a kid. I attempted to play the position called safety. It was a tough career!! It's a good think I didn't try to play Half Back!!

WalMart (WMT) has given some Half Back pattern signals over the last several months: Feb 3 Mar 29 May 18

There are three steps for trading high-probability trades on stocks.

1. Market Effectiveness Chart: gear shift 2. Trading Chart: Market Engine Indicator Pattern - Half Back in this case 3. Trading Chart: Market Engine Confirmation Lines - Yellow and Green in this case

One of my mentors early in my trading often said to me; pick what you are going to use to make trading decisions and get real good at it.

For a long time I bounced around with what those items might be. I grew tired of mis-information, lagging data and signals. If anything I wanted to know ahead of time when to sit up and pay attention. Kind of like a stop light at an intersection; when it switches from Green to Yellow....before hitting Red.

Well, it can take several days or even a couple weeks for these three to line up. When they do line up it is a high probability set up.

Generally the Market Effectiveness Chart is the early one. Although in some cases all three happen at the same time. But in many cases it is the Gear Shift first on the Market Effectiveness Chart (this is saying there is some misalignment of the stock's prices and it's corresponding index or futures market). Then it is generally the Market Engine Indicator pattern; this further tips the hand that the institutional algorithmic transactions are lining up to make an adjustment. And finally it is the Market Engine Yellow and (Green or Red) lines. This generally means the masses are showing up; and are typically the last to know. But you have been preparing so you are not surprised. We need their involvement; but we don't want to be surprised.

Go to financialinvestingradio.com, and down to the Podcast Charts & Videos section, look for FIR #16. There are a couple links there...one for the chart and the other for the video where I give an overview.

1. Market Effectiveness Chart: gear shift - This takes place on Feb 1st

2. Trading Chart: Market Engine Indicator Pattern - Half Back in this case - This takes place on Feb 2nd, and it is seen as the left gray vertical line.

3. Trading Chart: Market Engine Confirmation Lines - Yellow and Green in this case - This takes place on Feb 7th, a few days later, and it is seen as the right red vertical line.

In my podcast FIR # 14 I outline an option trade on Walmart. I won't outline this time which option trade to use. However, I want to point out when I tighten my stops. On the Trading Chart, where the Market Engine Indicator is located; if you look on the far right side you see both the Yellow and the Green lines dropping back down, I tighten my stops at that point.

When I walked away at the end of my one and only football season with my cool trophy I weighed 67 pounds. I enjoyed the game alot, but I just couldn't handle those 100 pound kids that were landing on me!! I found my sport in skiing...but that's for another time.

Until next time, Trade Safe!!

I am talking about PATTERNS today.

My Mom used to take me into fabric stores when I was a kid, ugh, that was tough on me! She was always looking for sewing patterns. I had to find something that looked like a tool...so I'd hang out in the thimble section. You can only look at thimbles for so long!!

I am going to focus on patterns of the Market Engine Indicator. We use this indicator on the trading chart. For Futures we put it on something like a 1 minute E-mini chart. For Stocks we put it on something like a range chart, which is configured based on the typical range of a specific stock. For example on WMT I have that configured as a 267 tick Range chart.

When you train your eyes you can see patterns that increase our probabilities for trading. These patterns apply on stock charts as well as futures charts.

For our purposes here I will use the E-mini futures charts. Go to financialinvestingradio.com and look in the Podcasts Charts & Videos section. Look for FIR #15 and you will see some links to the chart that I am using to identify patterns. I have also posted a video there describing some of these patterns.

Ok, so on the E-mini chart the indicator is green, because this is part of the NYSE Engine. One of the key things to look for is the orange horizontal lines on the indicator. The orange lines represent extreme levels of market effort to push price.

There are three patterns that I'll focus on here... The TWO STEP, The HALF BACK, and The DIVERGENCE.

Trend lines are used to help us visualize the patterns on the Market Engine Indicator and to know when the high probability point is to enter the trade.

PATTERN: TWO STEP This pattern is when the market engine indicator touches the same orange line, typically within 3 to 10 bars (candlesticks). Draw a trend line on the market engine indicator to identify the high probability entry location; as the indicator breaks the trend line, there is the location. Take a look at Two Step [2], Two Step [3], and Two Step [5] on the chart for examples of this pattern.

PATTERN: HALF BACK Many times the market will do multiple pushes in the same direction. The Half Back pattern helps identify this. Let's say the market engine has pushed price down, and the market engine indicator has touched the bottom orange line. Now the market engine pushes price back up, and as it does this, the market engine indicator gets half way (or maybe a little more); just past the 0 line.

Draw a trend line on the market engine indicator to identify the high probability entry location; as the indicator breaks the trend line, (in this example going back down), there is the location. Take a look at Half Back [4], Half Back [6], Half Back [8], Half Back [9], Half Back [11], and Half Back [12].

PATTERN: DIVERGENCE The Divergence pattern occurs when price continues further in a direction, but the market engine indicator is moving in the opposite direction. Draw a trend line on the market engine indicator to identify the high probability entry location; as the indicator breaks the trend line, there is the location. Take a look at Divergence [3], Divergence[4], Divergence [7], and Divergence [10].

Take a look at the chart that I am referring to; it is on financialinvestingradio.com, #15; and again I have a snippet from a video describing more about a couple of these patterns.

To show you my own progression, recently I went into a fabric store with my wife, I was able to walk through the whole store without hanging out in thimble section...so that's progress for me!

Thanks for joining, until next time; Trade Safe!

I saw Elton John in concert once and he sang "I Don't Have Much Money, But Boy If I Did...".

So, that leads me to ask about how much money it takes to trade. I've been looking at Walmart and the Market Engine signals there. Walmart always has low cost stuff, let's look at the trading opportunities.

So, in this podcast we will look at the WMT (Walmart) Trading chart with the Market Engine and it's companion Market Effectiveness Chart. We are going to look at some signals and then determine the cost of an option trade.

First, let's look for some signals. Go to financialinvestingsecrets.com and find the Podcast FIR #14 - you can find two charts there for this podcast. This time on the charts, rather than circle the points to look at, I have marked the charts with 1, 2, 3, 4; the numbers align across both charts.

Signal 1 on the Market Effectiveness chart is Feb 7: this is the gear shift, and it is when you start looking for a signal on the WMT Market Engine Trading Chart, in this case that signal 1 also comes on Feb 7.

Signal 2 on the Market Effectiveness chart works the same way; which is Feb 27: the gear shift occurs and the Market Engine signal 2 occurs on Feb 27.

I didn't outline all the signals on this chart, but the remaining two signals, numbers 3 and 4 have different dates for the Gear Shift signal and the Market Engine signal.

Signal 3 - Gear Shift on Mar 22 and the Market Engine signal 3 on Mar 29

Signal 4 - Gear Shift on Jun 13 and the Market Engine signal 4 on Jun 15

Ok, let's use Signal 4 to price some options. Now this signal occurred on Jun 15, and it was bearish. So for our purposes here I'm going to make two assumptions: 1. I am going to sell a vertical bear call spread, that is out of the money 2. I am going to price the option spread using today's price chain rather than the one from Jun 15

My point at this moment is to just show a sample of how much money is required to trade the options in a high probability direction. I won't go into why I sell options more than buy options...that's for another conversation.

The spread that I selected requires $500 in buying power plus margin requirements. It will produce $250 of profit over a few days. Even with an account of $5,000 you can easily conduct a succession of these stock trades.

The key to note here; when you are aware of the high probability move with the Market Effectiveness Chart and the Market Engine you are able to take higher profit strike locations. This means your option strike selection can be closer to the money, meaning more profit.

If you have any questions on that feel free to contact me at [email protected].

Thanks for listening, and until next time, Trade Safe!

So I won't go into any family wedgie stories, I'm sure we all have some to share. But the point of this podcast is that structure matters; market structure matters. I'm a personal fan of having a view that shows the real price movement, with time as a second class citizen.

So for stocks, I like to find the average true range and then create a range chart that is related to that ATR. NOW, if that didn't make sense then reach out to me and I'll be happy to answer your questions.

I want to see the market structure of a stock for its typical movements, and more important; I like to know when it is behaving in an a-typical fashion.

My favorite two tools for visualizing market structure are channels and wedges; and I put them on the range chart for the stock. By now you know that I will relate all this to the Market Engine and the Market Effectiveness Chart!!

So, I'm on a GOOG range chart that is based on its ATR and I have a wedge that is drawn that starts back on March 17, 2017 and goes up to June 8th. Here's how the trade scenario plays out.

On June 6th and 7th the Market Effectiveness chart for GOOG shifted gears; which happened to be when price was at the top of the wedge on the range chart.

I'm using the range chart for stocks with the Market Engine to trade; and on June 8th the GOOG Range Chart with the Market Engine, it gave a signal to the downside.

Now, we know that when you get near the tip of a wedge the support/resistance on those get very weak...

The key is to know, in which direction will the stock break? The Market Effectiveness chart gives the timing to prepare when it shifts gears (which it did on the 6th and 7th); the Market Engine chart (on the 8th) says...hey - I am going down.

Combining Wedges and Channels for illustrating structure with the Market Effectiveness and Market Engine charts...brings higher probability to our trading decisions.

I have put two charts up on my site at financialinvestingradio.com...if you scroll down you will see a list that has the names of the podcasts. To the right of that are two links [Trading Chart w/ Mkt Engine] [Mkt Effectiveness Chart]

On the Trading Chart w/ Mkt Engine...you will see a couple indicators. On the bottom is one part of the Market Engine, in this case it is a blue line because it is watching the NASDAQ. On the chart itself is are three dashed lines, Yellow. Red, and Green. They too comprise the part of the Market Engine for Stocks. The way to read it is when two of the dash lines go across to the other side of the stock AND when a Gear Shift has occurred on the Market Effectiveness chart...then you are in a high probability location to trade the stock. It takes a bit to adjust your eyes. But you will see more of these as we proceed.

For your own examination I collected a set of interesting dates on GOOG when there was a "gear shift", those dates are: Feb 2 Feb 27 Mar 8 Mar 24 Apr 4 Apr 10 Apr 13 May 2, 4 (No Mkt Eng Confirmation) Jun 1 Jun 6, 7

What happened near those dates? Take a look and let me know what you find!!

You can reach me at [email protected].

From now on, we can use wedgies for what they were really meant to be!

Trade safe!

Hi Everybody! Over the weekend we had a great family reunion...it's always good to catch up with extended family. Two weeks ago someone T-boned my daughter's car, ran right thru a stop sign and smacked her. Luckily no one was hurt; but the car is totaled. Over the weekend we also got to experience the joy of covering the gap of not enough insurance money to actually replace the car...ugh...I don't like that part. ;-)

So, we had to face the music of coughing up the extra! Sometimes the Insurance companies can just say "in your face"!

So, that got me to thinking, let's look at Facebook.

We use the core elements of the market engine to determine where the high probability trading and investing opportunities are located. I started these podcasts looking at futures...but now I am diving into both NYSE and NASDAQ stocks.

There are two key kinds of charts here that we use...oh, before I get there. I am going to be posting pictures of these charts on my site at financialinvestingradio.com...stay tuned, that is coming shortly. That way in the future you can follow along on the exact chart I'm discussing.

Ok, back to the two charts. There is a market effectiveness chart and a trading chart. The Market Effectiveness chart tells how well the stock is doing relative to near term futures indexes and also its relevant composite index. The Market Engine indicator is on the Trading Chart; it shows the effort of moving price.

Let's take a look at Facebook with these two charts.

First to recap, Friday June 16th the market dropped a bit in the morning to re-balance and then recovered. If you were following my podcasts you heard that we discovered that imbalance on the Market Effectiveness chart.

Ok, NOW let's look at Facebook; several dates here: April 3, 2017: there were two gear shifts on the Market Effectiveness chart and the Market Engine agreed to trade FB to the down side April 10, 2017: there were two gear shifts on the Market Effectiveness chart, letting us know a change was coming; the Market Engine gave the confirmation about one week later on Apr 18 to go to the upside May 8, 2017: the first gear shift, May 10th the second gear shift, and on the 17th the Market Engine agreed to go down; that was a very short term trade May 19, 2017: the Market Engine said to go up and the Market Effectiveness Chart confirmed that on the 19th as well

Right now, June 19th, the Facebook trading chart is showing some signals to the upside with a minor gearshift, not a strong gearshift.

Well, we all need to face the music at sometime...that's it for now. Thanks for listening in. Stay tuned for the charts on financialinvestingradio.com.

Until next time, trade safe!

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!

As temperatures rise in the summer we often find ourselves taking our children to frozen yogurt places. There was one point in their younger years when frozen yogurt places became quite the fad, very trendy. It seemed there was a new yogurt shop every few months. We decided to try them all. So we'd go test out one place, and then we'd vote on it. A few weeks later we'd pick another place and try it out. Soon there were factions in the family, one faction felt that Yogurt Place A was the best and another voted for yogurt place B.

When you go to pay for the yogurt you put your cup with the yogurt on a scale and they charge you based on the weight. One night while we were getting our yogurt weighted I noticed our two younger children's yogurt cups had every possible topping on it. "Eww...!", I said, "isn't that too sweet!?". "Nope!", they replied. And off they went with their cups. I started to watch more closely what they put on their yogurt. A pattern seemed to emerge. The pattern was multiple flavors mixed with all the toppings. Soon after they had their yogurt it would begin melting into a grey slurry...not very appealing. One night I asked them which was the best yogurt shop and they assured me they could tell.

Pick one thing to trade, get good at it; or pick one good technique and go with that; I trade with the Market Engine; it's not a potpourri of indicators; it's a direct feed of what's going on inside the market vehicle and whether or not you are aligned with it.

For example, On Monday, May 24th the Market Engine shifted gears and identified that EXXON (XOM) was changing...and you know it went down.

You need plenty of context, but an overage of indicators and lagging data only confuses me.

The market engine kicked again on June 6th, as XOM became mis-aligned with the engine...and as you know price went up...and is hanging around 82 at the moment.

When we are making trading and investing decisions...pick the amount of time you want to spend in your life managing it...and pick a strategy that will give real time information. Trading certain stocks can reduce the amount of time you spend watching the markets.

Until next time, don't mix too many yogurt flavors together, rather, use the market engine to help you stay on the right side.

This is Grant - trade safe!