Intermarket Analysis: Profiting from Global Market Relationships

by John J. Murphy

Praise for INTERMARKET ANALYSIS

"John Murphy has done it again. He dissects the global relationships between equities, bonds, currencies, and commodities like no one else can, and lays out an irrefutable case for intermarket analysis in plain English. This book is a must-read for all serious traders."
-Louis B. Mendelsohn, creator of VantagePoint Intermarket Analysis software

"John Murphy's Intermarket Analysis should be on the desk of every trader and investor if they want to be positioned in the right markets at the right time."
-Thom Hartle, President, Market Analytics, Inc. (www.thomhartle.com)

"This book is full of valuable information. As a daily practitioner of intermarket analysis, I thought I knew most aspects of this invaluable subject, but this book gave me several new ideas. I thoroughly recommend it for beginners and professionals."
-Martin Pring, President of Pring.com and editor of the Intermarket Review Newsletter

"Mr. Murphy's Intermarket Analysis is truly the most efficient and unambiguous way to define economic and fundamental relationships as they unfold in the market. It cuts through all of the conflicting economic news/views expressed each day to provide a clear picture of the 'here and now' in the global marketplace."
-Dennis Hynes, Managing Director, R. W. Pressprich

"Master Murphy is back with the quintessential look at intermarket analysis. The complex relationships among financial instruments have never been more important, and this book brings it all into focus. This is an essential read for all investors."
-Andrew Bekoff, Technical Strategist, VDM NYSE Specialists

"John Murphy is a legend in technical analysis, and a master at explaining precisely how the major markets impact each other. This updated version provides even more lessons from the past, plus fresh insights on current market trends."
-Price Headley, BigTrends.com, author of Big Trends in Trading

Genres: Finance, Business

288 pages, Hardcover

First published January 1, 2004

About the author

John J. Murphy is an American financial market analyst and is considered to be the Father of Inter-market Analysis. He received an award for outstanding contribution to global technical analysis by the International Federation of Technical Analysts.

Reviews

[John Boettcher · Rating 1 out of 5]

I don't think "John Murphy" has done it again. Using single formulas to determine how the markets reacted at one particular point in time is not telling us how the different markets will react under different circumstances in the future.

He is basically saying, "look, see what happened here with these two markets? Not just take this and apply it to every new situation in the future and the same thing will happen over and over again."

If the market really behaved like Murphy claims it does, how come this isn't the most valued book in the history of trading?

[Ethan Lambert · Rating 4 out of 5]

It's a good read for a novice.
He covers a very short time period and his lack of knowledge in Macroeconomics does result in him drawing ridiculous inferences and conclusion.
But such mistakes are few.
Another big Drawback it does not cover Currencies at all (forget about Crypto)
Overall a good read despite being dated.

[Liquidlasagna · Rating 3 out of 5]

one of the better books on chartist voodoo

i think Murphy went from writing books to working on stockcharts

.......

Amazone

A Panoramic Market View
10/10

John Murphy's Intermarket Analysis is an updating of his excellent 1991 text Intermarket Technical Analysis. Both books are the most clearly written and thought-provoking texts on this topic that I have encountered.

In the interest of disclosure, let me say that I do not know Mr. Murphy; nor has he or his publisher solicited this review. His editor at Wiley, Pamela Van Giessen, also edited a book I wrote on The Psychology of Trading. Knowing Ms. Van Giessen's integrity in a business that too often lacks that virtue, and having enjoyed Murphy's first book on the topic, I was eager to give "Intermarket Analysis" a thorough read.

Murphy begins with a review of the markets from the 1980s, recapitulating themes from the first book, including the close linkages among the currency, bond, commodities, and stock markets. His discussion of the role of oil and gold in economic slumps and booms is first rate, as he traces the interplay among these markets during the first Persian Gulf War and then during the "stealth bear market" of 1994. Throughout these presentations, Murphy captures qualitative relationships between markets that provide inspiration for traders interested in quantitative modeling. For example, the relationship between oil stocks and crude oil prices and the CRB/Bond Ratio are promising tools in capturing shifts in commodity prices that tend to impact the stock indices. I was particularly intrigued by his presentation of sector relationships during economic/market cycles, including the relative performance of cyclical and consumer stocks.

Where Murphy's book really shines, however, is in its explanation of intermarket relationships in a deflationary environment. He captures these relationships in his account of the recent bear market, drawing upon such diverse intermarket relationships as semiconductor stocks, Japanese markets, the Australian dollar, and the yield curve.

This alone is a major advance over his previous text. At the end of the book, he traces the start of the recent bull market, illustrating the transition from a deflationary environment to an inflationary one, a pattern that also occurred after the great bear market of the 1930s.

Weaknesses in this book, from this reviewer's perspective, include an overemphasis on charts and visual data at the expense of quantitative treatments and a glib treatment of the Kondratieff Wave (long-term economic cycles). That having been said, this is an excellent market book. The presentation of sector rotation during economic cycles alone provided enough ideas to keep me busy with modeling efforts. Chart-based technical analysts and quants alike can find value in Murphy's work.

Brett Steenbarger

......

Great Rewrite of a Landmark Work
8/10

The original book Intermarket Technical Analysis was great for its time, however some of the relationships it described change in a deflationary environment which the author suggests we are in. However, the best reason for the rewrite was the writing in the earlier book was terrible in my opinion. It was a terribly boring book, even if you are interested in the topic.

This book is different, and is a much better book. It also seems to me that the sector analysis coverage is a little more thorough (although I have not opened them up side by side to tell).

The only downside of this book is I don't think it gives you as many practical tools for tracking the business cycle and sector rotation as Pring's book, how to select stocks using technical analysis. It will give you the basics though, relying heavily on comparative relative strength.

If you want to see the big picture and understand how the markets are tied together, I can without hesitation recommend this book. There are several other books that complement this one as well.

Brian E. Mitchell

......

Great book

I am a professional equity analyst. Although I've spent time analyzing stocks and sectors under my coverage, studying different markets and understanding the share price movements within a much bigger context has always been a grey area and something that made me feel uncomfortable with all the time... until I came across this book.

I think the great thing about the book is how the text is laid out. Usually in a book, you read about all the concepts first and spend hours trying to understand what they are, and then you see examples related to the concepts.

In this book, Mr Murphy lays out a long-term market panorama before your eyes - and while you're reading about what the markets did during each time, you can quite easily pick up the bits and pieces of his theory that he puts here and there.

So that when you're done reading the market history, you end up with an understanding of Mr Murphy's intermarket principles in addition to the market history... which makes this a very readable book and yet extremely informative. This book is a bit outdated but I believe the book still has plenty of value for most readers.

Joseph Park

.......

[Mark · Rating 4 out of 5]

Great for learning how bonds, stocks, interest rates, currencies, commodities, and so on interact and affect one another. Unfortunately, the relationships have not held up in the last 5-10 years.

[Ilhom Hojiev · Rating 5 out of 5]

very good book to understand micro economics.

[Valentine Ssebuyungo · Rating 5 out of 5]

Every technical trader must read this book. Adds some fundamental knowledge to technical analysis and allows one to profit all year long

[Hou Boyu · Rating 4 out of 5]

It is very interesting to read John Murphy's book. I think the main reason for me is that I actually understand it. Very simple to follow. Bring your thoughts on a global scale. Give me ideas to run backtest and start with some ETFs.

[David Robins · Rating 4 out of 5]

Relationships between markets (stocks, bonds, currencies, commodities including gold) and market sectors (unfortunately only up to 2003).