Technical Analysis Plain and Simple: Charting the Markets in Your Language, Second Edition

Intermarket Analysis

Globally, all markets are connected, in that stocks are led by bonds that are themselves led by interest rates. Rates are determined by the economy, which takes its cue from raw materials prices. While technical analysis of any individual market can stand on its own, intermarket analysis can add another dimension to the process.

In his 1989 book, The Intermarket Technician, John J. Murphy made several key observations. He said that all markets are interrelated and that intermarket analysis borders on economic analysis. This is because traditionally non-technical terms, such as inflation and raw materials, are used. He also noted that the word “domestic” is “largely irrelevant.” This is shown in the shocks that frequently ...