Intermarket Technical Analysis: Trading Strategies for the Global Stock, Bond, Commodity, and Currency Markets (John J. Murphy, 1991)

• Basic guideline
1. All markets are interrelated; markets don't move in isolation.
2. Intermarket work provides important background data.
3. Intermarket work uses external, as opposed to internal, data.
4. Technical analysis is the preferred vehicle.
5. Heavy emphasis is placed on the futures markets
6. Futures-oriented technical indicators are employed.
• Key market relationships
1. Action within commodity groups, such as the relationship of gold to platinum or crude to heating oil.
2. Action between related commodity groups, such as that between the precious metals and energy markets. 
3. The relationship between the CRB Index and the various commodity groups and markets. 
4. The inverse relationship between commodities and bonds. 
5. The positive relationship between bonds and the stock market. 
6. The inverse relationship between the U.S. dollar and the various commodity markets, in particular the gold market. 
7. The relationship between various futures markets and related stock market groups, for example, gold versus gold mining shares. 
8. U.S. bonds and stocks versus overseas bond and stock markets
• The normal sequence of events
1. Rising interest rates pull the dollar higher.
2. Gold peaks. 
3. The CRB Index peaks. 
4. Interest rates peak; bonds bottom. 
5. Stocks bottom. 
6. Falling interest rates pull the dollar lower. 
7. Gold bottoms.
8. The CRB Index bottoms. 
9. Interest rates turn up; bonds peak. 
10. Stocks peak. 
11. Rising interest rates pull the dollar higher.
• Stages of business cycle
1. Bonds turn up (stocks and commodities falling)
2.  Stocks turn up (bonds rising, commodities falling)
3. Commodities turn up (all three markets rising) 
4. Bonds turn down (stocks and commodities rising)
5. Stocks turn down (bonds dropping, commodities rising)
6. Commodities turn down (all three markets dropping)
• Key principle
1. All markets are interrelated. 
2. No market moves in isolation. 
3. Chart action in related markets should be taken into consideration. 
4. Technical analysis is the preferred vehicle for intermarket work. 
5. Intermarket analysis adds a new dimension to technical analysis. 
6. The four key sectors are currencies, commodities, bonds, and stocks.
7. The U.S. dollar usually trends in the opposite direction of the gold market. 
8. The U.S. dollar usually trends in the opposite direction of the CRB Index. 
9. Gold leads turns in the CRB Index in the same direction. 
10. The CRB Index normally trends in the opposite direction of the bond market.
11. Bonds normally trend in the same direction as the stock market. 
12. Bonds lead turns in the stock market.
13. The Dow Utilities follow the bond market and lead stocks. 
14. The U.S. bond and stock markets are linked to global markets. 
15. Some stock groups (such as oil, gold mining, copper, and interest-sensitive stocks) are influenced by related futures markets.