CRB index Bonds
You'll also see that very often stock market moves are the end result of a rippleeffect that flows through the other three sectors—a phenomenon that carries importantimplications in the area of program trading.
BASIC PREMISES OF INTERMARKET WORK
Before we begin to study the individual relationships, I'd like to lay down some basicpremises or guidelines. This should provide a useful framework and, at the same time, help point out the direction we'll be going.Then I'll briefly outline the specific relationships we'll be focusing on. There are an infinite number of relationships that exist between markets, Then, are our basic guidelines:
1. All markets are interrelated; markets don't move in isolation.
2. Intermarket work provides important background data.
3. Intermarket work uses external, as opposed to internal, data.
4. Technical analysis is the preferred vehicle.
5. Heavy emphasis is placed on the futures markets.
6. Futures-oriented technical indicators are employed.
These premises form the basis for intermarket analysis. If it can be shown that all
markets—financial and nonfinancial.
A LOOK AT THE FOUR MARKET SECTORS-CURRENCIES, COMMODITIES, BONDS, AND STOCKS—IN 1989. FROM THE SPRING TO THE AUTUMN OF 1989, A FIRM U.S. DOLLAR HAD A BEARISH INFLUENCE ON COMMODITIES. WEAK COMMODITY PRICES COINCIDED WITH A RISING BOND MARKET, WHICH IN TURN HAD A BULLISH INFLUENCE ON THE STOCK MARKET.
Dollar index Stock