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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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Bonds benefit from a decline in commodity prices because this reduces inflationary pressures. For example, over the last several months, as bond yields go up, certain sectors of the market, such as economically-sensitive stocks, do better in that environment. Long a friend to the TraderPlanet.

Furthermore, the techniques shown in this article should be used in conjunction with other technical analysis techniques. The subsequent threat of global deflation pushed money out of stocks and into bonds.

John Murphy on Intermarket Analysis and the Sequence of Market Peaks | Financial Sense

Industrial metals and bonds rise for analyysis reasons. This marked a decoupling between stocks and bonds that would last for many years. Click here to learn how to enable JavaScript. The slider at the bottom of the chart makes it easy to travel back in time and view the relationship changes as they happen.

This means stocks rise when bonds fall and vice versa. Stay ahead with the world’s most comprehensive technology and business learning platform.

Intermarket Analysis [ChartSchool]

Pressprich “Master Murphy is back with the quintessential look at intermarket analysis. This ratio will decline when economic weakness and deflation are dominant. 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.


The ratio of industrial metal prices to bond prices will rise when economic strength and inflation are prevalent. 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.

He is a recipient of the Market Technicians Annual Award. Conversely, a decline in bond prices and rise in interest rates decreases the deflationary threat and this is positive for stocks.

Knowing these relationships can help chartists determine the stage of the investing cycle, select the best sectors and avoid the worst performing sectors. One indicator or one relationship should not be intermarkft on its own to make a sweeping assessment of market conditions. The Stealth Bear Market of 33 4. Inverse relationship between bonds and stocks.

Here’s what he had to say on our podcast about what’s taking place currently in the markets. Your Browser does not have JavaScript enabled! Yes, stocks and interest rates rise together. Trader Vic on Commodities: Muphy intermarket relationships depend on the forces of inflation or deflation. The and Tops Chapter 4: Visit your Subscriber Features to find updated information. This book is a must-read for all serious traders.

A rising Dollar puts downward pressure on commodity prices because many commodities are priced in Dollars, such as oil. Falling Dollar During Boosts Commodities Author Information John J. Rising commodity prices is a sign of global strength.

He also authored Technical Analysis of the Financial Markets.

Get unlimited access to videos, live online training, learning paths, books, tutorials, and more. InJohn was given the first award for outstanding contribution to global technical analysis by the International Federation of Technical Analysts, and is the recipient of the Market Technicians Association Annual Award.


The Economics of Commodity Markets. This updated version provides even more lessons from the past, plus fresh insights on current market trends. You will receive an email when this happens. Much of the material for this article comes from John Murphy’s book and his postings in the Market Message at StockCharts. The best part of Trading with Intermarket Analysis is that these critical market interactions are vividly illustrated with more than 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.

Intermarket analysis

Rate-sensitive stocks such as utilities have done poorly, on the other hand. Stocks rallied, but when the dollar dropped along with bond yields, we saw a tremendous surge of money into gold, Murphy noted.

A country’s currency is a reflection of its economy and national balance sheet. He has over 30 years of market experience and is author of several best-selling books, including Technical Analysis of the Financial Marketswhich is widely regarded as the standard reference in the field.

Futures Markets and Asset Allocation A price rise due to a supply shock is negative for stocks, but a price rise due to rising demand can be positive for stocks.