Intermarket analysis

Intermaket analysis is very very valueable. Because some sector might lead other sector. How should we identify them? Here we have some basic ideas.

1. Commodity with sector stock.
Crude Oil --> Oil Industry and Transportation, Steel Price --> Steel Industry, Wheat --> Food Industry. And so on and so forth. CRB index with inflation, Tbond. Commodity strong might indicator overall economy goes up since the raw marterial has higher demand.

2. Big Money
Currency like US Dollar index, Inflation CPI Index, T-Bond Price, Interest Rate, GOLD.
Some one take the currency adjusted Gold price, may get different conclusion on gold trend predication.
USD up might benefit small/mid us company but hurt big internation company.

3. Stock groups
We should look at sp stock sector groups, also, we can monitor Fidelity selected sector fund as well.

First, we need to get all the index, find their normal relation ship. Study who correlates who, positive or negative. When they decouple, what does it mean. Such as TBond and Stock market decouple, there could be panic on the market that all money goes t o TBond for save heaven.

This will help us identify the direction of the overall wind in the market. Also help us find trend reversal earlier than we could notice.

More more work to do.