When I first started trading, I knew little about anything and nothing about intermarket analysis. My thought then was you research a stock, and if it looks good, you buy it. I still practice this, but now I factor that information through the filter of “big picture” analysis, and my software utilizes intermarket analysis as the basis for analysis, so when I read the question below, I found it interesting. As well, it provided worthy kudos for one of the contributors on this site.
Not a question but a comment. You mentioned intermarket analysis (July 23 2010). Some years ago, I read a book (can’t remember the title, sorry) explaining the subject. Of recent, I’ve enjoyed your own Kevin Klombie. It is not precisely IA [intermarket analysis], but his work ekes out market relationships. I find his articles compelling!
In his landmark 1995 textbook, Technical Analysis of the Financial Markets, none other than John Murphy wrote his considered appraisal of Louis B. Mendelsohn’s contributions to the advancement of both technical analysis and the trading-software industry. Here is one sentence from that book.
“Louis B. Mendelsohn was the first person to develop intermarket analysis software in the financial industry during the 1980s.
Check out this video from John Murphy: http://vp.tradertech.com/secrets-revealed/whats-needed.asp
Perhaps the writer was referring to John Murphy’s book, or, perhaps he was referring to one of the books Lou Mendelsohn has written on the subject of intermarket analysis. Either way, the fact is that IA has been on the radar since Lou Mendelsohn began utilizing it in software way, way back in the 1980s. On a side note, a couple of years ago, I chatted with Lou Mendelsohn in his office. Yes, we discussed intermarket analysis (enlightening for sure), but of greater interest to both of us on that day was our passion for writing, our passion for language and the components of language – words. When he spoke about writing, you could see in his eyes and hear in his words, a genuine caring about writing. It just goes to show you, one can stretch the mind to master more than one thing …
Switching my mind to another subject, today I was reading in the Wall Street Journal online an article titled, “Ten Stock-Market Myths That Just Won’t Die.” Good stuff, and I suggest everyone read it. The one myth most appealing to me, though, is one I have pounded in this column over and over again – economists are good at predicting the future. The sentences below sum it up nicely.
The record for economic forecasts is not impressive. Even into 2008, many economists were still denying that a recession was on the way … Warren Buffett once said [economic] forecasters made fortune tellers look good.
Trade in the day; invest in your life …
