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Sometimes sentiment is so evenly split that it's hard to ascertain the consensus for a particular theme.

For example, some investors assert, long and loud, that rising rates will not have a negative effect on banks, brokers and homebuilders because, they state nearly apoplectically, these businesses are not nearly as interest-rate sensitive as they used to be. It seems to me that they're saying, "It's different this time."

Then, of course, other investors aver, long and loud, that rising rates will be the death knell for banks, brokers and homebuilders because, they state nearly apoplectically, these businesses are still interest-rate sensitive, and rising rates will be problematic. It seems to me that they're saying, "It's not different this time."

So who's right? My opinion isn't really important, but here's what I know about financials and rates:

  • Rates are going to go higher than most people believe.

    Take a look at the year-over-year percentage change in the two-year Treasury note yield. While this rate of gain has moderated in the past month from 134% to 115%, I firmly believe that the equity market has never warmly received a rate of change of this magnitude.

    Furthermore, as my friend Michael Belkin routinely states, the fed funds rate is 200 basis points below the consumer price index. A more normal level would be about 200 basis points above the CPI. The Fed has its work cut out for it, and rates are going to be higher than most believe.

  • You can't escape the influence of Citigroup ( C).

    Citigroup is my bellwether, guiding light, lead dog, torchbearer, pacesetter and, for my money, the most important stock in the world. This stock makes up 11.2% of the S&P Financials index, which in turn is the biggest sector in the S&P 500, comprising 22% of the major average. So, it makes sense that, if Citigroup is the biggest component of the biggest sector in the S&P 500, it's the most important stock in the world.

    Furthermore, Citigroup is 22.7% of the Philadelphia Stock Exchange/KBW Bank index, or BKX. It also makes sense that if Citigroup is the biggest component of the biggest sector in the S&P 500 and the biggest component in the BKX, it makes one scenario likely: If Citigroup weakens, as I believe it will, then it's going to be hard for the rest of the components in these indices to sidestep Citigroup's downside influence.

    A Weakening Bellwether
    Citigroup may have a downside influence
    Source: Bloomberg, Natexis Bleichroeder
    Click here for larger image.

    It might sound like I'm picking on Citigroup, as I contend that it is weakening and will weaken further. However, I see it a little differently. Because Citigroup is so important to my market opinion, it's imperative that I start nearly every market conversation with my take on Citigroup's chart action. Because I believe this stock will weaken further, I find it pretty hard to get aggressive on the market.

    I continue to find stocks with improving to good patterns, and I'll still be searching. Nevertheless, I'll keep focusing on Citigroup because I believe its weakness will either (a) portend a market correction, or (b) imply that a market transitional phase is occurring in which Citigroup will relinquish its bellwether status and another will replace it.

    If it's (a), then I'll get more cautious with longs and more aggressive with shorts. If it's (b), then I'd better pay attention to the charts because market transitional phases are often challenging from a performance perspective.
    John Roque is the technical analyst at Natexis Bleichroeder, a New York-based investment brokerage firm specializing in Europe and the U.S., and a frequent guest on CNBC. At time of publication, Roque had no position in any of the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. He appreciates your feedback and invites you to send it to jroque@thestreet.com.