What Is Intermarket Analysis? A Practical Guide for Traders and Investors
Most investors watch one market at a time — their stocks, their bonds, maybe the news. But markets don’t operate in isolation. Stocks, bonds, currencies, and commodities are constantly influencing each other in ways that can signal what’s coming next. Intermarket analysis is the discipline of reading those signals — and using them to make smarter decisions.
In this article
What is intermarket analysis?
Intermarket analysis is a method of studying the financial markets by examining the relationships between different asset classes — primarily stocks, bonds, currencies, and commodities. Rather than analyzing any one market in isolation, intermarket analysis looks at how these markets move relative to each other to identify trends, confirm signals, and anticipate future price movements.
The approach was popularized by technical analyst John Murphy, whose work showed that these four asset classes are deeply interconnected. A shift in one market — say, rising bond yields — tends to have predictable ripple effects across the others. Understanding those ripples gives traders and investors a significant informational edge.
“No market moves in a vacuum. Every major trend in stocks, bonds, currencies, or commodities is telling you something about the others.”
For long-term investors, intermarket analysis helps identify which asset classes and sectors are in favor during a given phase of the economic cycle. For active traders, it provides confirmation — or warning — that a trend has broader support across markets, or is about to reverse.
The four asset classes that matter
Intermarket analysis is built around four major asset classes. Each plays a distinct role in the global economy — and each reacts differently to changes in inflation, interest rates, and economic growth.
Equities (Stocks)
Represent ownership in companies. Generally rise in periods of economic expansion and fall during contraction. Sensitive to interest rates and corporate earnings expectations.
Fixed Income (Bonds)
Government and corporate debt instruments. Prices move inversely to yields. Often the first asset class to signal changes in monetary policy and economic expectations.
Currencies (Forex)
The relative value of one currency against another. The US Dollar Index is the most watched. A strong dollar typically pressures commodities and international equities.
Commodities
Physical goods including metals (gold, silver), energy (oil, natural gas), and agriculture (wheat, corn). Closely tied to inflation expectations and global demand.
Each of these asset classes is tracked across global markets using ETFs — exchange-traded funds — which makes them accessible and easy to compare across timeframes. This is precisely how the InterMarketStats monthly reports are structured: every major segment, measured consistently, so you can see the full picture at a glance.
The key intermarket relationships
The power of intermarket analysis lies in understanding the core relationships between these asset classes. These are not random — they reflect deep economic logic about how capital flows in response to growth, inflation, and monetary policy.
| Relationship | Type | What it means |
|---|---|---|
| Stocks vs. Bonds | Inverse (often) | When bonds fall (yields rise), stocks often come under pressure — borrowing costs increase and growth expectations moderate. |
| Bonds vs. Commodities | Inverse | Rising commodity prices signal inflation, which pushes bond prices down (yields up). Falling commodities suggest deflation, which is bond-friendly. |
| Dollar vs. Commodities | Inverse | Most commodities are priced in US dollars. A stronger dollar makes them more expensive globally, reducing demand and prices. |
| Dollar vs. Gold | Inverse | Gold is a classic dollar hedge. When the dollar weakens, gold typically rises as investors seek a store of value. |
| Stocks vs. Commodities | Positive (often) | Both tend to rise in economic expansions as demand increases. Divergences between them can signal turning points in the cycle. |
Important note
These relationships are tendencies, not certainties. They hold most reliably over medium to long timeframes. Short-term divergences happen — and are themselves informative, often signaling stress or a coming reversal in one of the markets.
How to use intermarket analysis in practice
You don’t need to be a professional analyst to benefit from intermarket analysis. The core practice is straightforward: regularly review how each major asset class is performing relative to the others, and look for confirmations or divergences.
Track performance across all four asset classes
Don’t just watch your own portfolio. Look at what bonds, currencies, and commodities are doing simultaneously. A monthly report covering all segments gives you the baseline.
Compare multiple timeframes
A 7-day change tells you about momentum. A 30-day change shows the current trend. A 180 or 360-day change reveals the big picture. Each timeframe tells a different story — and together they give you context.
Look for confirmations and divergences
When stocks and bonds are both rising, that’s a broadly healthy signal. When stocks are rising but bonds are selling off hard, that’s worth paying attention to — the bond market is often early.
Identify sector rotation
Not all sectors move together. Energy, utilities, financials, and technology each behave differently in different parts of the cycle. Tracking relative sector performance helps you see where capital is flowing.
Use it as context, not a crystal ball
Intermarket analysis doesn’t predict the future. It gives you a framework to interpret what markets are telling you right now — and to position yourself accordingly.
Tools and reports to get started
The biggest barrier to intermarket analysis used to be data. Gathering and organizing performance data across hundreds of ETFs, across multiple timeframes, across every asset class — manually — takes hours. That’s the problem InterMarketStats was built to solve.
Each monthly report delivers pre-built performance tables and charts covering every major market segment — major indices, sectors, industries, metals, energy, agriculture, fixed income, currencies, and global country ETFs — so you can spend your time analyzing, not aggregating.
The free Monthly Market Pulse covers the 30-day view across all segments. The Premium report adds six timeframes (7, 30, 60, 90, 180, and 360 days), giving you the full picture of where momentum is building, where it’s fading, and where capital is rotating.
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