What Is Intermarket Analysis and Why Does It Matter for Traders?

Intermarket analysis is the study of relationships between stocks, bonds, currencies, and commodities to understand where a single market is likely headed next. It matters because markets do not move in isolation, and traders who ignore these relationships often react to price after a move has already started. VantagePoint AI applies this concept at scale. It analyzes 1.4 million data points every day and forecasts market direction up to 3 days in advance with up to 87.4% proven accuracy. 

Why Traders Struggle When They Only Watch One Market 

Most traders learn to analyze markets one chart at a time. They watch a single stock’s price action, apply a handful of indicators, and make decisions based on what that one chart shows. This narrow view creates a real problem: markets influence each other constantly, and the clues often show up somewhere else first. 

Bond yields frequently shift direction before stocks follow. The US dollar often moves opposite commodity prices. Currency pairs react to shifts in risk sentiment well before individual stocks catch up. A trader watching only one chart misses all of this. By the time a single market signal appears, the move has often already started elsewhere. 

Consider a trader watching a technology stock ahead of a Federal Reserve interest rate decision. The stock chart alone will not show that bond yields already started moving days earlier, or that the US dollar was quietly gaining strength against a basket of currencies. Both of those shifts often carry information about how equities are likely to react once the announcement lands. A trader who only has the stock chart open is working with a fraction of the available picture. 

This is the gap that intermarket analysis is built to close. Instead of reacting to price after the fact, traders who understand how markets relate to each other can anticipate shifts before they show up on a single chart. That difference, reacting versus anticipating, is often what separates traders who catch moves early from those who are consistently one step behind. 

What Is Intermarket Analysis? 

Intermarket analysis is the practice of studying two or more related financial markets together, rather than analyzing a single asset in isolation. The core markets involved are usually stocks, bonds, currencies, and commodities. The idea is that these four asset classes are constantly influencing one another, and reading them together provides a fuller picture than any single chart can offer on its own. 

The concept is credited to financial analyst John Murphy, who is widely known for examining how movements in one segment of the financial markets tend to carry over into other, related segments. Intermarket analysis is generally used to gauge whether an asset class is strengthening or weakening relative to other related asset classes, which can help identify where the broader market cycle stands and which assets are likely to lead or lag next. 

Markets are typically described as having a positive or negative correlation with each other. A positive correlation means two markets tend to move in the same direction. A negative correlation, also called an inverse correlation, means they tend to move in opposite directions. Neither relationship holds constant forever, and the strength of a correlation can shift as economic conditions change, which is part of why intermarket analysis works best as an ongoing process rather than a one time chart study. 

For traders, the practical value is straightforward. A single chart shows what has already happened to one asset. Intermarket analysis adds context: what is happening in related markets right now, and what that has historically meant for the market a trader is actually watching. 

How Intermarket Analysis Works in Practice 

Markets rarely move in a vacuum. When one asset class shifts, it tends to influence others through a chain of cause and effect. Understanding a few of the most consistent relationships is where intermarket analysis starts. 

Bonds and stocks often move together over long stretches, but bonds tend to turn first. When bond prices reverse direction, it can be an early signal that stocks are about to follow. 

The US dollar and commodities frequently move in opposite directions. A strengthening dollar tends to weigh on commodity prices, while a weakening dollar often supports them. 

Currencies react quickly to shifts in risk appetite. When traders move toward safe haven assets like gold, currencies such as the Japanese yen or Swiss franc often strengthen at the same time. 

Commodities respond to many of these same forces. Gold is often described as a safe haven asset, and when uncertainty rises, whether from inflation concerns, geopolitical tension, or a weakening currency, demand for gold tends to increase. That shift in gold prices can be an early clue about broader risk sentiment, well before it shows up in stock indexes. 

None of these relationships hold constant forever. Correlations shift as economic conditions change, which is exactly why tracking them manually is so difficult. A trader who wants to stay current has to watch several markets at once and continuously reassess how they are relating to each other. 

Which Markets Are Analyzed Together? 

Intermarket analysis typically focuses on five connected asset classes: 

• Stocks: Equity indexes and individual names, viewed for how they respond to shifts elsewhere. 

• Bonds: Yields and prices, often the earliest market to signal a broader shift. 

• Currencies: Exchange rates, which respond to interest rate expectations and risk sentiment. 

• Commodities: Oil, gold, and other raw materials, closely tied to currency strength and inflation trends. 

• Cryptocurrencies: Bitcoin and other digital assets, increasingly tracked for their relationship to the US dollar and broader risk sentiment. 

Each of these markets can offer an early clue about where the others are headed next. 

Does Intermarket Analysis Apply to Crypto Markets Like Bitcoin? 

Cryptocurrency used to be treated as its own isolated corner of the market, disconnected from stocks, bonds, and currencies. That has changed. Bitcoin and other digital assets increasingly move in relationship with broader risk sentiment, the strength of the US dollar, and interest rate expectations, much like other assets that respond to global risk appetite. 

When the dollar weakens or investors become more willing to take on risk, Bitcoin has often moved alongside stocks and other assets that benefit from that same risk appetite. When the dollar strengthens or risk appetite fades, those same assets, including crypto, have often moved together in the opposite direction. Applying intermarket analysis to crypto works the same way it does for stocks, bonds, or currencies. It comes down to tracking how Bitcoin and other digital assets are relating to the broader markets around them, rather than analyzing a crypto chart in isolation. 

Intermarket Analysis vs Traditional Technical Analysis 

Traditional technical analysis and intermarket analysis are not competing approaches. They work best together, but they answer different questions. The table below breaks down how each one is typically used. 

How AI Changes Intermarket Analysis 

Tracking four asset classes and their shifting relationships is demanding even for an experienced trader. Correlations do not stay fixed. A relationship that held for months can weaken or reverse as economic conditions change, and catching that shift by watching charts manually is close to impossible for one person to do consistently. 

This is where AI changes what is possible. Neural networks can process far more market relationships at once than a person ever could, and they do it continuously, without fatigue or bias. Instead of a trader trying to mentally track bonds, currencies, commodities, and stocks all day, AI can process those relationships around the clock and surface what actually matters. For a closer look at how this technology is applied across different trading styles, attend our next Free Live AI Training.  

How VantagePoint AI Applies Intermarket Analysis to Forecast Market Direction 

VantagePoint AI was built around the same principle Murphy first identified: markets do not move alone. The difference is scale. Rather than tracking a handful of relationships by hand, VantagePoint AI’s neural networks analyze 1.4 million data points every day, drawing on intermarket relationships across up to 30 related global markets per asset to forecast where a given stock, option, or currency pair is likely headed next. 

This dual patented approach has demonstrated up to 87.4% proven accuracy in forecasting market direction, and it forecasts market direction up to 3 days in advance, giving traders a window to prepare before a move happens rather than after. The technology has been developed and refined since the company was founded in 1979, built on more than 40 years of neural network training data and real market behavior. 

Today, 47,000+ traders across 138 countries use VantagePoint AI to see the same kind of intermarket relationships that institutional desks have tracked for decades, without needing to build correlation models or monitor multiple markets by hand. VantagePoint AI applies this same intermarket approach across stocks, options, forex, and cryptocurrencies, including Bitcoin, using the same neural network process to forecast market direction up to 3 days in advance.  

For a trader who understands why intermarket analysis matters but does not have the time or tools to track it manually, this is the practical version of that same idea, running continuously in the background. 

VantagePoint AI’s Patented Approach to Intermarket Analysis 

VantagePoint AI’s approach to intermarket analysis is not just a marketing claim. It is backed by two United States patents that describe exactly how the software identifies and applies relationships between markets. 

The first patent, US Patent No. 8,442,891 B2, granted in 2013, covers the process VantagePoint AI uses to perform intermarket analysis with neural networks. It details a proprietary method for selecting which outside markets, out of a large pool of global financial markets, carry the most relevance for forecasting a given primary market. Rather than treating every outside market as equally important, the patent describes how the software identifies key intermarkets, general intermarkets, and forecasting intermarkets specific to each market a trader is watching. 

The second patent, US Patent No. 8,560,420, also granted in 2013, covers the process VantagePoint AI uses to turn that intermarket data into forecasting technical indicators. Most traditional technical indicators are built entirely from historical price data, which means they tend to lag behind the market. This patent addresses that lag by combining historical data with neural network output, producing indicators built to lead price action instead of follow it. 

Both patents trace back to research that Vantagepoint AI founder Lou Mendelsohn began decades ago, applying neural network pattern recognition to global intermarket data years before AI became a mainstream trading topic. That foundation is still what VantagePoint AI builds on today, backed by more than 40 years of neural network training data, and it is a large part of why the software’s intermarket forecasts are difficult for competitors to replicate. 

Frequently Asked Questions About Intermarket Analysis 

What is intermarket analysis in simple terms? 

Intermarket analysis is the practice of comparing related financial markets, typically stocks, bonds, currencies, and commodities, to understand how movement in one is likely to affect the others. Instead of watching a single chart, traders look at the bigger picture across multiple connected markets. 

How is intermarket analysis different from technical analysis? 

Traditional technical analysis studies price action within a single market. Intermarket analysis studies the relationships between several markets at once. Many traders use both together, applying technical analysis to time entries within a market that intermarket analysis has already flagged as worth watching. 

Which markets should traders watch for intermarket signals? 

The four core markets are stocks, bonds, currencies, and commodities. Bonds often move first, currencies respond quickly to shifts in risk sentiment, and commodities react closely to currency strength, particularly the US dollar. 

Is intermarket analysis useful for beginner traders? 

Yes, though tracking multiple markets manually can be overwhelming for someone new to trading. This is where AI powered tools like VantagePoint AI help, since the software processes the intermarket relationships automatically and presents traders with forecasts rather than raw correlation data. 

How does VantagePoint AI use intermarket analysis to forecast market direction? 

VantagePoint AI analyzes 1.4 million data points every day across a wide range of related global markets, applying neural network forecasting to identify how relationships between stocks, bonds, currencies, and commodities are likely to affect a specific trade. This process has demonstrated up to 87.4% proven accuracy in forecasting market direction, and it forecasts market direction up to 3 days in advance. 

Do correlations between markets ever change? 

Yes. Correlations are not fixed relationships. A positive correlation between two markets can weaken, disappear, or even flip to a negative correlation as economic conditions shift. This is one of the main reasons intermarket analysis works best as a continuous process rather than a one time study, and it is part of why AI powered tools that reassess relationships daily have an advantage over static, manual approaches. 

Does intermarket analysis apply to Bitcoin and other cryptocurrencies? 

Yes. Bitcoin and other digital assets increasingly respond to many of the same macro forces as stocks, bonds, and currencies, including the strength of the US dollar and broader risk sentiment. VantagePoint AI applies its intermarket analysis process to cryptocurrencies as well as traditional markets, using the same neural network approach to forecast market direction up to 3 days in advance. 

See Intermarket Analysis in Action 

Markets are connected, whether a trader is watching for it or not. Bonds can signal shifts before stocks follow. The dollar and commodities may move in opposite directions. Currencies often react to risk sentiment before individual stocks catch up. Traders who understand intermarket analysis are working with a fuller picture than those watching a single chart alone. 

VantagePoint AI applies this same principle at scale, analyzing 1.4 million data points every day and forecasts market direction up to 3 days in advance. 

Join the next free live trading class and see where the markets are going before they move.