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. The following is a summary of our recent interview with market technician John Murphy, which can be accessed on our site here or on iTunes. In finance, intermarket analysis refers to the study of how “different sectors of the market move in relationships with other sectors.” Technical analyst John J. Murphy pioneered this field.

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Intermarket analysis – Wikipedia

Rising commodity prices is a sign of global strength. Conditions Right Now We currently see stocks at record levels and interest rates are starting to rise. This marked a decoupling between stocks and bonds that would last for many years. Obviously, a big advance in commodities would be bearish for bonds.

We currently see stocks at record levels and interest rates are starting to rise.

Skickas inom vardagar. Not all commodities are created equal. Rising prices reflect increasing demand and a healthy economy; falling prices reflect decreasing demand and a weak economy. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Asian central bankers raised interest rates to support their currencies, but high interest rates choked their economies and compounded the problems. This ratio will decline when economic weakness and deflation are dominant.

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. And these same forces that push stock prices up, push bond prices down. 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.


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.

Conversely, a decline in bond prices intermar,et rise in interest rates decreases the deflationary threat and this is positive for stocks. The slider at the bottom of the chart makes it easy to travel back in time and view the relationship changes as they happen. Yes, stocks and interest rates rise together. In particular, oil is prone to supply shocks.

Intermarket analysis

Stay ahead with the world’s most comprehensive technology and business learning platform. We also saw a sharp drop in the dollar. Countries with strong economies and strong balance sheets have stronger currencies. Big events, such as the US Financial crisis, can throw certain relationships out of whack for a few months. Learn how to utilize ETFs to trade and profit off these key market drivers.

Thinking Globally Appendix Index The direction of interest rates not only tells us something about the direction of the stock market, but where we want to be positioned, Murphy stated. A weak Dollar acts an economic stimulus by making US exports more competitive. This means stocks rise when bonds fall and vice versa.

Study Guide John J Murphy. The Economics of Commodity Markets.

Intermarket Analysis [ChartSchool]

For that reason, John Murphy is referred to as the father of intermarket analysis with his books a standard reference among technicians. The ratio of industrial metal prices to bond prices will rise when economic strength and intermxrket are prevalent.


Low interest rates stimulate economic activity and boost corporate profits. People became very optimistic about the economy with infrastructure spending, inflation, and other stimulatory forces expected to ramp up.

Bonds benefit from a decline in commodity prices because this reduces inflationary pressures. There will come a point in the cycle where rising commodity prices trigger inflation, and the Fed will get aggressive, he stated. Skip to main content. He has over 30 years of market experience and is author of several best-selling books, including Technical Analysis of the Intermaarket Marketswhich is widely regarded as the standard reference in the field.

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Click here for a live Intermarket PerfChart. In an inflationary environment, stocks react positively to falling interest rates rising bond prices. The New Normal Chapter InJohn was given the first award for outstanding contribution to global technical analysis by the International Federation of Technical Anakysis, and is the recipient of the Market Technicians Association Annual Award.

This is an essential read for all investors. A Review of the s 1 2. While the Dollar and currency markets are part of intermarket analysis, the Dollar is a bit of a wildcard. Over the last month or two, Murphy said he has been watching the slide in the price of oil and the pullback in base metals such as copper.

Deflation is negative for stocks and commodities, but positive for bonds.