What is the intermarket analysis of the stock market?

Instead of looking at financial markets or asset classes on an individual basis, intermarket analysis looks at several strongly correlated markets or asset classes . These can include stocks, bonds, currencies, and commodities.

What is the relationship between bonds and commodities?

Commodities and Bonds As commodity prices rise, the costs of goods moves upward . This increasing price action is inflationary, and interest rates also rise to reflect the growing inflation. As interest rates rise, bond prices fall because there is an inverse relationship between interest rates and bond prices.

What are the key intermarket relationships?

These are the key intermarket relationships in an inflationary environment: Positive relationship between bonds and stocks . Bonds changing direction ahead of stocks (typically) Inverse relationship between bonds and commodities.

What percentage of my portfolio should be in commodities?

What Percentage of My Portfolio Should Be in Commodities? Experts recommend around 5-10% of a portfolio be allocated to a mix of commodities.

Are commodities good in a portfolio?

A commodities allocation offers investors three potential benefits: positive long-term returns, low correlations to stocks and bonds, and a hedge against inflationary pressures . In this section, we review some of the theoretical and empirical evidence supporting each.

What is the difference between stocks bonds and commodities?

The major asset classes include: Equity or “stock” is fractional ownership of a company. Fixed Income includes debt securities such as bonds. Commodities are physical—usually relatively raw—goods that come from the earth such as oil, cotton, gold and soybeans.

What are the two types of analysis in stock market?

Fundamental analysis evaluates securities by trying to measure their intrinsic value. Technical analysis focuses on statistical trends in the stock's price and volume over time . Both methods are used for researching and forecasting future trends in stock prices.

What is integrated stock market?

Stock market integration is an indication that the stock markets of different regions are marching together in the same direction, thereby ensuring identical returns on assets for a particular risk factor .

How do day traders analyze stocks?

Day traders typically use a combination of strategies and analysis, including technical analysis, which focuses on past price movements and trading patterns, and momentum, which involves capitalizing on short-term trends and reversals .

What are the two financial market sentiment indicators from the US stock market?

They use several indicators to measure market sentiment to help them determine the best stocks to trade, including the CBOE Volatility Index (VIX), the high-low index, the bullish percent index (BPI) , and moving averages.

Trading with Intermarket Analysis - (Wiley Trading) by John J Murphy (Paperback) (2024)

About the Book

"A visual guide to market trading using intermarket analysis and exchange-traded fundsWith global markets and asset classes growing even more interconnected, intermarket analysis--the analysis of related asset classes or financial markets to determine their strengths and weaknesses--has become an essential part of any trader's due diligence. In Trading with Intermarket Analysis, John J. Murphy, former technical analyst for CNBC, lays out the technical and intermarket tools needed to understand global markets and illustrates how they help traders profit in volatile climates using exchange-traded funds.Armed with a knowledge of how economic forces impact various markets and financial sectors, investors and traders can profit by exploiting opportunities in markets about to rise and avoiding those poised to fall. Trading with Intermarket Analysis provides advice on trend following, chart patterns, moving averages, oscillators, spotting tops and bottoms, using exchange-traded funds, tracking market sectors, and the new world of intermarket relationships, all presented in a highly visual way. Gives readers a visually rich introduction to the world of intermarket analysis, the ultimate tool for beating the markets Provides practical advice on trend following, chart patterns, moving averages, oscillators, spotting tops and bottoms, using exchange-traded funds, tracking market sectors, and intermarket relationships Includes appendices on Japanese candlesticks and point-and-figure charting Comprehensive and easy-to-use, Trading with Intermarket Analysis presents the most important concepts related to using exchange-traded funds to beat the markets in a visually accessible format"--

Gives readers a visually rich introduction to the world of intermarket analysis, the ultimate tool for beating the markets
Provides practical advice on trend following, chart patterns, moving averages, oscillators, spotting tops and bottoms, using exchange-traded funds, tracking market sectors, and intermarket relationships
Includes appendices on Japanese candlesticks and point-and-figure charting

Comprehensive and easy-to-use, Trading with Intermarket Analysis presents the most important concepts related to using exchange-traded funds to beat the markets in a visually accessible format.

From the Back Cover

Praise for Trading with Intermarket Analysis

"John Murphy makes it absolutely clear that all markets are interrelated. It would be silly to trade stocks without keeping an eye on interest rates, currencies, and gold. In this valuable new book, the master of technical analysis teaches all of us how to monitor and profit from intermarket relationships."
--Dr. ALEXANDER ELDER, author of The New Trading for a Living, www.elder.com

"Murphy's basic premise is that a trader's analysis needs to extend beyond the market itself to also encompass interrelationships with other markets--a broader perspective that is essential not only in understanding the big picture but also in providing valuable early warning signs through lead-lag relationships. The best part of Trading with Intermarket Analysis is that these critical market interactions are vividly illustrated with more than 150 color charts, providing valuable food for thought not only for chartists but also fundamentalists, as an understanding of intermarket connections is essential for all traders. One lesson I have learned from interviewing market wizards is that intermarket price action provides essential trading clues. In this context, Murphy's book offers traders a valuable resource and idea repository."
--JACK SCHWAGER, author of Market Wizards and the Schwager on Futures book series

"In today's lightning-fast, interconnected global markets, savvy traders capitalize and profit on intermarket movements. Murphy's new book shows traders how to read the charts and understand intermarket dynamics in an easy-to-understand visual fashion. Learn how to utilize ETFs to trade and profit off these key market drivers. Long a friend to the TraderPlanet.com community, Murphy once again shines with his latest must-read book for all traders."
--LANE J. MENDELSOHN, founder, TraderPlanet.com

About the Author

John J. Murphy is a former technical analyst for CNBC and has over forty years of market experience. He is senior writer for StockCharts.com, a website that specializes in financial charts and technical analysis education. Murphy has appeared on Bloomberg TV, CNN, FOX, and the Nightly Business Report, and has been widely quoted in several other media outlets. In 1992, he was given the first award for outstanding contribution to global technical analysis by the International Federation of Technical Analysts, and received a lifetime achievement award from the same organization in 2014. He is a recipient of the Market Technicians Annual Award. In addition to two previous books on intermarket analysis, he also authored two editions of The Visual Investor, all of which are published by Wiley. He also authored Technical Analysis of the Financial Markets. Murphy has a bachelor of arts in economics and a master of business administration from Fordham University. He currently lives in New Jersey.

Trading with Intermarket Analysis - (Wiley Trading) by John J Murphy (Paperback) (2024)

FAQs

What is the intermarket analysis of the stock market? ›