Intermarket analysis studies the relationships between asset classes, typically currencies, bonds, commodities, and stocks.

It can help traders generate broader trading ideas, reveal potential market turning points, or confirm other analysis methods.

The price action of currencies is often driven by their relationship with commodities, bonds, and stock indices.

For example, here are some traditional intermarket relationships:

• A falling U.S. dollar is viewed as positive for commodities prices, while a rising U.S. dollar is considered negative for commodities price.

• Falling bond prices/rising interest rates tend to be negative for stocks while rising bond prices/falling interest rates are normally good for stocks,

• Rising commodities prices are historically a sign of economic growth which is good for the stock market and negative for bond prices.

Whew!

That’s a lot of intermarket correlations to remember! And that’s just a couple of intermarket relationship examples.

Here’s a neat one-page cheat sheet for you to bookmark and make it easy for you!