Intermarket Analysis 2010 and beyond.

Quote from SuperCruz:

That is a great offer, Mr. Murray. Looking forward to more such offers. :)
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I am out of town this week. I should post more systems by the middle of the month.
 
Quote from Murray Ruggiero:

Yes. The Dow index is negatively correlated to the dollar. In fact I created a ETF system which trades the DIA and DOG ETF's. You can access the systems rules for free by registering on TradersStudio.com and being logged in and using the following link. Registering on TradersStudio.com is free.

http://tradersstudio.com/TradingSystems.aspx

When logged in you will see the Trading System menu and the above link will bring you there. This is the first Free system, we will be sharing more with you over the next few months.
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Sincere thanks for the reply and your efforts in sharing the valuable and useful trading information. :)
 
I just wanted to update my results on trading crude using it's negative correlation to the dollar.
 

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Quote from Murray Ruggiero:

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.
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Murray, don't these rules imply a leader/follower relationship with lag, where the intermarket is the leader and the traded market is the follower? Correlated markets are easy to find, but it's extremely difficult to establish a consistent leader/follower relationship. In fact, if you could find such a relationship then you'd be printing money.

Can you please elaborate on how to qualify correlated markets for your strategy?
 
Quote from Trader13:

Murray, don't these rules imply a leader/follower relationship with lag, where the intermarket is the leader and the traded market is the follower? Correlated markets are easy to find, but it's extremely difficult to establish a consistent leader/follower relationship. In fact, if you could find such a relationship then you'd be printing money.

Can you please elaborate on how to qualify correlated markets for your strategy?
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Let's look at the cases where we are looking at futures markets. In those cases the stock sector indexes for example utility stocks will lead bonds. The reason why is the large amounts of research in the equity markets causing their price action to lead the underlying commodities.

Other type of relationships are due to fundemental analysis. One example is silver and bonds. We can use silver as a proxy for inflation and this nature makes it a leading indicator.

The proof of all of this is in the eating, I have many intermarket based systems which have been profitable since the 1990's without even changing parameters. If a system works for 10 years or more without any changes, it would not be hard to say that my assumptions are not correct.

In addition it does not have to alway be leading to work, it could just be out of sync and using a arbitrage effect we can forcast the market turning points.

Intermarket analysis is also not perfect. This is why I do use correlation analysis as well as something I invented called predictive correlation to hande when these relationships go out of sync.
 
Quote from Murray Ruggiero:

... Intermarket analysis is also not perfect. This is why I do use correlation analysis as well as something I invented called predictive correlation to hande when these relationships go out of sync.
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Murray, thanks for your comprehensive reply. For others following this thread, Murray describes "predictive correlation" in chapter 8 of his book, Cybernetic Trading Strategies, or you can find more info on this technique with a Google search.
 
Quote from Trader13:

Murray, thanks for your comprehensive reply. For others following this thread, Murray describes "predictive correlation" in chapter 8 of his book, Cybernetic Trading Strategies, or you can find more info on this technique with a Google search.
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Yes, I developed this methodology back in the 1990's and still use it today.
 
Quote from Trader13:

Murray, thanks for your comprehensive reply. For others following this thread, Murray describes "predictive correlation" in chapter 8 of his book, Cybernetic Trading Strategies, or you can find more info on this technique with a Google search.
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Murray also has 2 other books well worth adding to any ones libary who is interested in this suject IMHA
. Technology in Trading for the New Mellennium
. Inside Advantage Back Issue Collection
You can get both from his web site www. tradersstudo.com:cool:
 
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