Intermarket Analysis

Sometimes these markets decouple, I use these simple models in my trading to analyze if an intermarket is predictive , not as a stand alone system. On fact that you need to remember is that I originally published these systems , my Bond-Silver, and Bond-UTY between 5 and 10 years ago, yes drawdown has increased but they remain profitable , even using the same parameters for the moving averages.

When developing a complete system using intermarket analysis you need to use correlation between the markets as a filter.

I will run Gold-Swiss Franc soon.
 
OK, decoupling, but one curious thing, looking at the Dollar/Crude data you posted, is that even though the dollar and crude were highly correllated in 2005r (and 2004?), the system took a dive? Now, that's curious b/c the two behaved in lockstep the last half of 2004 and throughout 2005.
 
I ran the Swiss Frank as an intermarket for gold , using my price moving average intermarket divergence model. I found that it is not very predictive, it works well on the short site, since gold was in a bear market. On the long site , even the best combinations lost money.
 
Murray,

Can you run that ratio of swiss/gold to find out if it is predictive of the S&P? From my limited understanding, its a good gauge of fear versus fundamentals in the S&P (or maybe even Dow) and predictive of it or vice-versa. Seems money runs to that cross when hell breaks loose in the S&P. Have you heard of this?
 
I will need to run this analysis on the cash markets because you can't take ratio's of backadjusted contracts. Let me see if I have the cash swiss franc data. I need to look though my symbols and find it.
 
Murray,

Can you post the results for the above last two posts? Thanks.

(We haven't heard from you in a week, so maybe you found something good that's worth keeping as a secret? :-) )
 
Thank you for reminding me. I have been working on TradersStudio 2.0 as well as my system tutorial thread and it slipped my mind. I will look into it and post it soon.
 
Quote from gnome:

I recall your name and remember reading your articles. Nevertheless, I still view intermarket analysis as "a fools errand", overall.

I spent 20 years chewing on all the data and indicators.... and boiled it down to K.I.S.S.... You don't get paid for having your position "in tune with interest rates", or "volume", or "what Greenscam said", or "inflation", or "the ROC of the MACD Stochastic"....

You only make money when your position is in tune with PRICE. Either it is, or it isn't.

I recommend traders learn to trade off of "PRICE ONLY". They will make more money and do so with less risk.
More...

(lol, I like the "Greenscam" part...)

I would wholeheartedly reaffirm the above! Price is all that matters. But to delve into even deeper truths, the count matters more. These are not Elliott's 5/3 counts. The market repeats a subtler, more extended series of sequences. Discover these and they will lend you greater predictive power than you've ever felt.

I saw Murphy's book advertised on Stockcharts.com and assumed that intermarket analysis was a way of explaining how related indices moved. I am disappointed to hear that it is mainly about funnymentals.

However, I do think that comparing related movements is benificial. I've been doing it for quite a while now with the Dow, S/P, and Nasdaq Comp. I always called it RELATIONAL ANALYSIS.

Comparing relalated instruments can provide clues that would otherwise remain unknown. It IS a powerful concept!

Rgds,
fx
 
Quote from swingman:

Murray,

Can you run that ratio of swiss/gold to find out if it is predictive of the S&P? From my limited understanding, its a good gauge of fear versus fundamentals in the S&P (or maybe even Dow) and predictive of it or vice-versa. Seems money runs to that cross when hell breaks loose in the S&P. Have you heard of this?
More...

I played with this and did not see anything exciting. Profitable on the long side, loses money on the short side. This ratio does not work anywhere near as well as thirty year or ten year bonds.
 
Mr. Ruggiero,

So, is this thread dead? Did you or anyone else find the free data source to continue on with a group experiement?

-Swingman
 
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