Quick Charting Mid-February Intermarket Money Flow Shift

Feb 21, 2014: 1:27 PM CST

A clear short-term trend has developed on the Intermarket or Cross-Market Money flow perspective.

Let’s take a quick look at the recent activity and compare movement in key markets:

Intermarket Cross-Market Money Flow February 2014

A quick four-grid format allows us to compare and contrast money movement in US Equities (@ES Futures for the S&P 500 index), two commodity markets (Gold and Crude Oil), and the US Dollar Index (@DX for the futures contract).

Simplifying the picture, we’ve seen persistent money flow through February into Stocks, Gold, and Oil, at least until February 19th.

A quick picture shows that the @ES moved up from 1,740 to 1,840; Gold traded up from $1,240 to $1,330; Oil traded up from $96.00 to $103.00.

Of course, not all markets can trade up – that’s the point of Intermarket Analysis.  We take a top-level approach to see where money is flowing IN but also where it’s flowing OUT.

The US Dollar Index saw outflows that took the @DX futures contract from $81.40 to $80.00 through most of February so far.

While these trends – as highlighted – have been clear, take a closer look at the February 19th to present period which took place this week.

All four markets “retraced” or traded against the recent short-term trend in February.

Stocks, Gold, and Oil retraced from their peaks while the Dollar Index reversed powerfully off the $80.00 contract level.

As traders, we’re always assessing the odds for a trend in motion to continue (we’ll trade retracements if so), retrace (we’ll stand aside and wait for a retracement to ‘shake out’ before joining the prevailing trend), or else reverse.

Even if you don’t trade the other markets, be sure to compare price movement in these terms (retracement vs. reversal) into next week.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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