Posting the article...I think that this topic is important and very rational:
Experienced futures traders know, that there are lots of correlations exist between the markets, some of them can help so much in definition, for example, market trends, but some of them are
not constant. This article is dedicated to some of the main correlations between the markets, and probably, it will be very useful for traders without experience. But, it also can to fresh the
memory to experienced traders, who are probably forgotten some of the market correlations.
It`s important to point, that market correlations are never predictable for 100%, but some correlations sometimes can turn back on the 180 degrees.
US Dollar - Gold: The gold market and dollar usually are trading by the reverse attitude. It`s proceeding for a long time. In periods of prosperity the American economy and snow inflation
usually the dollar makes profit from investing in American shares (bonds) in that time when physical actives (gold) is not so attractive. Inverse, in periods of slow economy development of USA,
more higher inflation, or increased global economical or political instability, the traders are trying to change the "paper" actives on the "hard" like a gold. Inflation is an usual feature for
gold.
US dollar - American paymasters duties: As the rule, the more stronger dollar means the more stronger shares market, thanks to the big ask on the US dollars
(from the foreign investors), needs for buying the American bonds. The bonds was always characterized as asset of the "refuge" in time of economical and political instability. In past the US
dollar was also concerned as the "refuge" currency. But, after terroristic attacks against the USA and taking into consideration the recession of American economy, the status of the "green" as
the safe harbor is expressed weaker.
The damp oil - American paymasters duties: If the prices on the damp
oil suddenly will go up, it will make a negative influence on the prices of the US bonds, it`s also considering, that growing inflations pressure may create the problems for economy. Inflation
- is the worse enemy for the market of shares. The growing price of the oil also is an usual reason for the gold market.
CRB - American paymasters duties: The index of CRB - is the articles of consumption basket, united in a one compound price. The increasing of CRB index means the general increasing of the
prices on staff and growing inflation. In a such way, the increasing of CRB index tell on the prices of American shares.
The indexes of US shares - American paymasters duties: Because the bull`s market on the market of American shares is finished more than two years ago, the prices of the futures on the shares
indexes and the futures prices on the bonds were bargaining in reverse ratio. When the bush of shares is growing up, obligation prices are going down. But during the long bull`s trend market,
which was taking precedence of present descending market, share prices and stock prices were bargaining in tandem. As the matter of the fact, long ago, before the beginning of the era of e-night
futures trading, the best way to know it beforehand, before the shares indexes will be opened, was to look at morning trading on the stocks.
The silver - Soya Beans: This correlation is from the sphere of fantastic, at least to this time. But, during "energetic" days, flying precious metals,
and prices on the soy, it`s saying, that if the futures have gained the top limit, the beans traders will buy the futures on the silver.
The pork - Horned Cattle: Here we should say, that, if by the futures of one kind of meat observing the increasing or decreasing of the price, that on the another kind working the inverse
effect. Fox example, the sudden falling of the Horned Cattle will put on weight to the pork.
Currency futures - the dollar index: The majority of currency futures of IMM market "crossing over" against the US dollar. So, in a such way, when the majority of currencies are bargaining on
the top, looks like, the index of dollar will bargain below. The currency traders should take a look at the index of dollar, because it`s the best barometer of the US dollar`s general health
against foreign currencies.
The index of US shares - wood: The wood - very important staff for American economy. It`s like a building block of the nation. If the market of shares
in general go up, the futures prices on the wood will support it. The falling of index shares, probably, will create the offers on the selling wood futures.
The New York cacao - British pound: The London`s futures trading on
the cacao also are important ( if even more) than, New Yorkers , by their influence on the global cacao market. The London`s trading of cacao are performing in the currency of the British
pound. So, in a such way, big cycling of the pound will influence on the price of American cacao futures, because of British pound cycling against US dollar. Take into consideration, that there
is exist constant arbitrage between new yorkers and londons cacao markets, that`s why, cross-courses between pound and the dollar are very important.
The grain - the index of US dollar: The weak dollar will give assurance to the futures on the American grain,because it makes the exporting the grain from USA more competitive ( by the
more cheaper prices) on the world market. The strong increasing trend of the dollar will make negative influence on the grain.
Labels: trader online trading online useful tips profit profit online daly trading trading profit trader earn by trading home business business at home earn money earn money online