1.
INTERMARKET
ANALYSIS
A Global Roadmap including Bitcoin

2.
WHAT INTERMARKET
ANALYSIS DOES
 Combines All Markets into a Unified and Coherent
whole.
 Bridges Gap Between Fundamental, Economic, and
Technical Analysis.
 Examines the Correlations between Four Major Asset
Classes: Stocks, Bonds, Commodities, and Currencies.
 No Market Moves in Isolation, the World is Connected.

3.
Traditional Intermarket
Relationships
 The U.S. Dollar trends in the opposite direction of commodities.
 A Falling Dollar is bullish for commodities; a rising dollar is bearish.
 Commodities trend in the opposite direction of bond prices.
 Therefore commodities trend in the same direction as interest rates.
 Rising commodities coincide with rising interest rates and falling bond
prices.
 Falling commodities coincide with falling interest rates and rising bond
prices.
 Bond prices normally trend in the same direction as stock prices.

4.
Traditional Intermarket
Relationships
 Rising bond prices are normally good for stocks, falling
bond prices are bad.
 Therefore, falling interest rates are normally good for
stocks; rising interest rates are bad.
 The bond market, however, normally changes direction
ahead of stocks.
 A rising dollar is good for U.S. stocks and bonds, a
falling dollar can be bad.

5.
New Normal Relationships
 Dollar and Commodities trend in opposite
direction.
 Stocks and Commodities trend in the same
direction.
 Falling Bond Yields have hurt Stocks-until
recently.

6.
What Has Changed? Deflation!
 3 major deflationary events in the last 15 years.
1. Started with the 1997-1998 Asian Crisis.
2. The Dot Com Bubble.
3. Great Financial Crisis.
 When deflation is the main threat stocks and
commodities become closely related.
 During a deflation bond prices rise while stocks fall.

7.
Where are we now? King Dollar rules.
Why?
 Abenomics is in full swing.
 Eurozone in the process of massive QE.
 China also easing.
 A global easing cycle is underway sans US
 Fed Hawks want to raise US interest rates sooner
rather than later and the market perceives this.
 Still THE flight to safety.

8.
Who/what is a rising dollar bad
for?
 Everyone and everything (except the US for now) , including
bitcoin.
 A rising dollar results in lower foreign currencies and stock
markets.
 Investment funds tend to flow toward countries with stronger
currencies.
 Stronger currencies are the result of higher or perceived
higher interest rates due to stronger economic conditions in
a particular country.
 Bad for commodities as well.

9.
Inflationary Relationships
 A positive relationship between bonds and stocks
 Bonds usually change direction ahead of stocks
 An inverse relationship between bonds and
commodities
 An inverse relationship between USD and commodities
 Stocks react positively to falling interest rates.

10.
Deflationary Relationships
 Largely the same relationship except for one.
 Stocks and bonds become inversely correlated.

11.
Currencies

12.
Commodities

13.
Emerging Markets

14.
Europe & Japan & Australia

15.
This is what QE does!

16.
Global Interest Rates
What the hell is going on?

17.
Global Interest Rates
 Bonds have been getting hammered as rates rise, even
though commodity prices are off the lows.
 Monetary Policy has been very easy
 Is the bond market smelling a resurgence of growth in
the second half of 2015?
 Are inflation expectations picking up?

18.
Bitcoin

19.
Correlation does not imply
causation

20.
Bitcoin trades like a
commodity
 Not like a currency, but it is affected by both.
 Massively volatile still, even though trading has been
rangebound for a few months.
 Trades mainly on sentiment and technicals.
 Still hard to trade in size without moving the market.

21.
From a correlation standpoint
 Still a very young asset, so hard to make definitive
correlations.
 Doesn’t correlate with anything for long periods of time.
 However, there are four factors that appear to be
affecting the price.

22.
4 factors affecting Bitcoin
Price
 The Shanghai
 The USD
 Interest rates
 Off exchange activity, low liquidity on exchange

23.
Local Bitcoin Volume

24.
Bitfinex Volume vs Price

25.
Bitcoin Conclusions
 The 50 day EMA has been massive resistance, still is.
 Volume is anemic, OBV tells us s, not imminent
reversal.
 Bear markets can end in time or price. If Price were to
stay in this range, bear market could end in mid-late
July.
 I don’t anticipate time ending it. Price will.

26.
Conclusions
 Shanghai is in a major uptrend look for this to continue, all Chinese Speculation is
going there.
 USD is also in a major uptrend, but has been consolidating in recent months, look
for uptrend to continue.
 Europe has averted disaster, and the equity markets look to be bottoming here.
 Interest rates have been repricing from really depressed levels and due to the
liquidity paradox. Is it a reset from the depths of hell? Or is more economic growth
coming in the 2nd half of 2015? Where is the inflation?
 Commodities have gotten a bounce from recent dollar weakness and interest rates
ticking up, but downtrend still intact.

27.
Contact me
 Email: george.samman@gmail.com
 Twitter: @sammantic