Instead of looking at financial markets or asset classes on an individual basis, it looks at several strongly correlated markets or asset classes--most often, stocks, bonds, commodities, and currencies. Although once viewed with skepticism, intermarket analysis has now become an accepted part of technical market analysis. Trading with Intermarket Analysis will show you that it has also become an increasingly indispensable part of it. Drawing on his vast experience as both an educator and an expert trader, John Murphy explains what he calls the "new normal" in intermarket relationships that exists as we enter the second decade of the new century. Through a combination of sound economic principles and striking color graphic illustrations, he reveals what those "new normal" relationships are and how you can take advantage of them. In addition, Murphy shows how intermarket analysis plays an important role in asset allocation and sector rotation strategies, both of which are tied to the business cycle, and details how exchange-traded funds ETFs have greatly facilitated the application of intermarket strategies.
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Intermarket analysis is a method of analyzing markets by examining the correlations between different asset classes. In other words, what happens in one market could, and probably does, affect other markets, so a study of the relationship s could prove to be beneficial to the trader. Key Takeaways Intermarket analysis is a method of analyzing markets by examining the correlations between different asset classes.
A simple correlation study is the easiest type of intermarket analysis to perform, where results range from This type of analysis expands on simply looking at each individual market or asset in isolation by also looking at other markets or assets that have a strong relationship to the market or asset being considered.
For example, when studying the U. The changes in the related markets, such as commodity prices, may have an impact on the U. There are different approaches to intermarket analysis, including mechanical and rule-based. A simple correlation study is the easiest type of intermarket analysis to perform. Compare Accounts.
Intermarket Analysis by John Murphy
He dissects the global relationships between equities, bonds, currencies, and commodities like no one else can, and lays out an irrefutable case for intermarket analysis in plain English. This book is a must-read for all serious traders. As a daily practitioner of intermarket analysis, I thought I knew most aspects of this invaluable subject, but this book gave me several new ideas. I thoroughly recommend it for beginners and professionals.
Kashakar Conditions Right Now We currently see stocks at record levels and interest rates are starting to rise. This means they both move in the same direction. Low interest rates stimulate economic activity and boost corporate profits. This ratio will decline when economic weakness and deflation are dominant. Visit your Subscriber Features to find updated information.