Intermarket Analysis: Profiting From Global Market Relationships by John Murphy is a must-read for market participants in the year 2025. The book was published in the early 1990s at a time when the Internet and computers were getting into the hands of retail traders. For context, it was a time when ETFs were rolling out, allowing traders to gain exposure to indexes of markets, sectors, and industries without the need to sift through all the competitors in their baskets. Intermarket analysis identifies that all money in a system moves from one asset to another. Money does not disappear; instead, for every sale of a position, the purchasing power of another position increases. For example, if I sell BTC for USD, BTC's purchasing power lowers and USD's purchasing power increases. Like buckets of water spilling over into one over the other. This books is ever relevant today as blockchain and permission free finance has enabled globally market participation.

This book lays out the relationship between the four broad markets: stocks, bonds, commodities, and currencies. Again, broadly speaking, these four markets revolve in a rhythmic pattern through correlations and hedges against inflation. With cryptocurrency as a new asset class, I will meditate on how these new digital currencies absorb and coordinate with the other markets. Below is a quote giving a general flow of the four markets:

Basic market principles:

• All markets are linked domestically and globally.

• No market moves in isolation; analysis of one market should include all the others.

Market groups:

• The four market groups are stocks, bonds, commodities, and currencies.

Market relationships:

• The dollar and commodities trend in opposite directions.

• Bond prices and commodities trend in opposite directions.

• Bonds and stocks normally trend in the same direction.

• Bonds peak ahead of stocks during deflation, and bond prices rise while stocks fall.

• A rising dollar is good for US bonds and stocks.

• A weak dollar favors large multinational stocks.

Effects of the commodity-bond ratio:

• A rising commodity-bond ratio favors inflation-type stocks, including gold, energy, and basic material stocks like aluminum, copper, paper, and forest products.

• A falling commodity-bond ratio favors interest-rate-sensitive stocks, including consumer staples, drugs, financials, and utilities.

As often happens in financial markets, the anticipation of an event is usually worse than the event itself. The market discounts expected events well before they happen.

Intermarket Analysis: Profiting From Global Market Relationships by John Murphy is a must-read for market participants in the year 2025. The book was published in the early 1990s at a time when the Internet and computers were getting into the hands of retail traders. For context, it was a time when ETFs were rolling out, allowing traders to gain exposure to indexes of markets, sectors, and industries without the need to sift through all the competitors in their baskets. Intermarket analysis identifies that all money in a system moves from one asset to another. Money does not disappear; instead, for every sale of a position, the purchasing power of another position increases. For example, if I sell BTC for USD, BTC's purchasing power lowers and USD's purchasing power increases. Like buckets of water spilling over into one over the other. This books is ever relevant today as blockchain and permission free finance has enabled globally market participation.

This book lays out the relationship between the four broad markets: stocks, bonds, commodities, and currencies. Again, broadly speaking, these four markets revolve in a rhythmic pattern through correlations and hedges against inflation. With cryptocurrency as a new asset class, I will meditate on how these new digital currencies absorb and coordinate with the other markets. Below is a quote giving a general flow of the four markets:

Basic market principles:

• All markets are linked domestically and globally.

• No market moves in isolation; analysis of one market should include all the others.

Market groups:

• The four market groups are stocks, bonds, commodities, and currencies.

Market relationships:

• The dollar and commodities trend in opposite directions.

• Bond prices and commodities trend in opposite directions.

• Bonds and stocks normally trend in the same direction.

• Bonds peak ahead of stocks during deflation, and bond prices rise while stocks fall.

• A rising dollar is good for US bonds and stocks.

• A weak dollar favors large multinational stocks.

Effects of the commodity-bond ratio:

• A rising commodity-bond ratio favors inflation-type stocks, including gold, energy, and basic material stocks like aluminum, copper, paper, and forest products.

• A falling commodity-bond ratio favors interest-rate-sensitive stocks, including consumer staples, drugs, financials, and utilities.

As often happens in financial markets, the anticipation of an event is usually worse than the event itself. The market discounts expected events well before they happen.