- We look for the major 4 asset classes, interest rates markets, stocks, commodities and currencies they are all trying to trend, not conflicting with each other and not in consolidation, we want to see at least 2 of them trending.
- This is the approach using the other asset classes to confirm the ideas of your trade. For example if we think a bullish dollar will come, then commodities should fail to make higher highs and the lows are being traded trough easily. The opposite would be seen if we want to see bearish dollar.
- Look back the last 12 months of the net positions of the commercial trades, we look at the lowest low and highest high in that and then we have a range we divide that in half and use that for being bullish or bearish.
- Open interest.
- Seasonal tendency.
- This is a way of gaging when the market gets quiet before a big explosive move
- Major news headlines. If we see 2 of the 4 major asset classes trending, and were bullish and a news event comes out and it starts jawing that its not strong and bullish and its weak, then we do the opposite and we keep buying and dont listen to the news
- Market sentiment
Major 4 asset classes. Are they trending or in consolidation, we want to see 2 at least trending.
If stocks are in consolidation then commodities should be trending and vice versa.
Interest rates or currencies, 1 of them must be trending
Group them
Stocks and commodities, 1 of them must be trending
Interest rates and currencies, 1 of them must be trending
There was a specific teaching in january about it. Intermarket analysis
Is a bullish idea on 1 asset class supported by another asset class, so if were bullish on the dollar does commodities support the idea by going lower and has it come into resistance?