Taking a Close Look at Countertrending Cross-Market Money Flow to Start February

Feb 1, 2014: 3:09 PM CST

An interesting event is taking place from the Intermarket or Cross-Market Money Flow perspective and it’s worth taking a closer look.

For one, we’ve seen continued strength in US Stocks and relative weakness or short-term downtrends in the other main markets.

Recently, we’ve seen a clear counter-trend movement as seen clearly on the 5-market chart below:

Intermarket Analsis Cross market Money Flow Broader Trends Gold Stocks Oil Treasuries Dollar Currencies

First, let’s note the persistent uptrend in the US Stock Market.

Let’s balance that with persistent and somewhat surprising downtrends in ALL four other main asset classes.  Typically oil and stocks trend together in the same direction – it’s odd to see them separate for long periods of time.

Even stranger is to see the typical “Risk-On” or offensive markets (commodities and equities) trend persistently in the same direction as traditional “Risk-Off” or defensive markets such as US Treasuries and the US Dollar Index.

However, all markets have steadily declined through the end of 2013 while stocks continued their stellar rise.

Going into 2014, these trends have all morphed into a clear counter-trend situation where uptrending stocks fell yet all other ‘downtrending’ markets rose.

The US Dollar Index bottomed in October while Crude Oil, Gold, and US Treasuries bottomed (short-term) near the end of December.

Since then, money has flown into these markets and – relatively speaking – out of US Equities.

This is a sneak-peak of a chart and additional analysis presented in this week’s “Intermarket Strategy Planning Report” available to members.

Even if you don’t trade these markets, it’s helpful to pull your perspective up to the Cross-Market Money Flow landscape for a broader view of global trends.

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Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning parameters as we watch a “hold and bounce” or “break and retrace” scenario play out in the near future.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter:  http://twitter.com/afraidtotrade

Corey’s new book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

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