Intermarket Analysis 2010 and beyond.

Murray Ruggiero

Murray Ruggiero

Sponsor
I have had several intermarket threads over the years. Here is a new one to first review the background information which we have covered in earlier threads then this thread will move forward and address new topics in intermarket analysis.
 
Orginal Post from 2005, which explains basic concept of intermarket divergence

Intermarket analysis has many fans and many detractors. The fans believe in it because these relationships are logical and some of them have actually built trading systems using them. The detractors will point out that these relationships (breakdown) and most system don't work in the long run. I have been working with Intermarket analysis for well over a decade. I will try in this thread to share some of my knowledge with you on this topic.

One issue that many of the detractors discuss is that these relationships don't work out of sample. One advantage I have is that I discuss many of them in public some over a decade ago. If they made money over the past ten years, guess what I think they worked.

I hope I get a lot of questions on this topic. Intermarket analysis is one of my favor areas of technical analysis.

In John Murphy's first book, published in 1991 on Intermarket analysis he used the crash of 1987 to lay out his Intermarket hypothesis. The problem is that until I built and published Intermarket based trading systems in 1994, no one had confirmed his work in a public forum. Many institutional traders used the concepts, but rules to mechanical trading systems, which used Intermarket analysis, were not generally publicly available.

I developed a very simple concept for Intermarket based systems. For positively correlated markets

If Intermarket is in up trend and traded market in down trend then buy
If Intermarket is in down trend and traded market is in up trend then sell

You can use various concepts to defined an up and down trend. In most of my work I used price relative to a moving average.

For negatively correlated market we have as follows:
If Intermarket is in up trend and traded market in up trend then sell

If Intermarket is in down trend and traded market is in down trend then buy

This is my introduction entry in this thread. I will include many examples as well as a historical view of the Intermarket research I have published over the years during the coming days and weeks.
 
http://www.elitetrader.com/vb/showthread.php?s=&threadid=55456&perpage=10&pagenumber=8

your post in the above thread on 06.08.10 2:14pm

Quote from Murray Ruggiero:

Is there still any interest in intermarket analysis. I am going to start posting a lot of new material soon and what to know what topics I should spend time on.
More...

There were responses from members including myself but very little from you.

Now today we get another thread from you on "Intermarket Analysis" with the first two posts by you. btw...I was not surprised when I clicked to read the thread and found that you were the OP.

Also we get this "announcement" today, and I have to question "Why the new thread on Intermarket Analysis? Was the post from back in June and now just lead ins to your "Announcement"?"

http://www.elitetrader.com/vb/showthread.php?s=&threadid=210729

Quote from Murray Ruggiero:

I will be adding several new trading systems for sale on TradersStudio.com in the next week or so. I will be posting results of these system both on ET and also on the web site with the writeup for the systems.
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I will reserve judgment until either there is or is not follow through from you this time!
 
Quote from da-net:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=55456&perpage=10&pagenumber=8

your post in the above thread on 06.08.10 2:14pm



There were responses from members including myself but very little from you.

Now today we get another thread from you on "Intermarket Analysis" with the first two posts by you. btw...I was not surprised when I clicked to read the thread and found that you were the OP.

Also we get this "announcement" today, and I have to question "Why the new thread on Intermarket Analysis? Was the post from back in June and now just lead ins to your "Announcement"?"

http://www.elitetrader.com/vb/showthread.php?s=&threadid=210729



I will reserve judgment until either there is or is not follow through from you this time!
More...

That is a fair criticism. I have been working on finish up things which I was way behind on and now I am beginning to catch up. Sorry that I have neglicted my threads.

I know I have to prove that I am going to follow though this time.
 
I have been using intermarket analysis to develop trading systems for almost two decades, since John Murphy's first book came out in 1991. What I offered new with my research was instead of viewing these relationships on charts, I built mechanical systems using them. Almost of all of them are based on my intermarket divergence concept I discussed in the first thread.


In John's first book he covered intermarket relationships and used crash of 1987 as his model to explain them. The first question we can explore is are these relationship's still valid or has changes to a world economy made some of them invalid ?.
 
Quote from Murray Ruggiero:

That is a fair criticism. I have been working on finish up things which I was way behind on and now I am beginning to catch up. Sorry that I have neglicted my threads.

I know I have to prove that I am going to follow though this time.
More...

I think that I have given you ample opportunity(time) to follow through. Looks like it was this just another marketing scheme. What do you think, Mr. Ruggiero? Did you follow through?
 
Quote from da-net:

I think that I have given you ample opportunity(time) to follow through. Looks like it was this just another marketing scheme. What do you think, Mr. Ruggiero? Did you follow through?
More...

TradersStudio Professional will be released this coming week. After that we are going to be doing alot of posts on ET.
 
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