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Intermarket Trading Strategies by Markos Katsanos

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Introduction
With the emergence of the internet and international cross border trading, the world’s futures and equity markets started to converge, making intermarket analysis an essential constituent of technical analysis.
Single market technical analysis indicators were designed in the 1980s for national markets, and are no longer sufficient nor can be relied upon for analyzing the constantly changing market dynamics.
But how do markets interact and influence each other and how can we use intermarket relationships to construct a viable technical system?
Because the answers have been so elusive, they became the motivation for my research. The more I looked into it, the more I became convinced that there is clear and incontrovertible evidence that the markets are linked to each other, and incorporating intermarket correlations into a trading discipline can give a trading advantage. Two years of research later, I finally came up with some rules and mathematical formulae for intermarket trading.
It has been more than 15 years since John Murphy, a pioneer on the subject, wrote his first book on intermarket analysis. The material in my book is based on original research not published anywhere else and, unlike Murphy’s intuitive chart-based approach, I am going to use mathematical and statistical principles to develop and design intermarket trading systems appropriate for long- and short-term and even day trading.
Although the book makes extensive use of market statistics obtained ...

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