Traditional technical work has tended to focus its attention on an individual market,
such as the stock market or the gold market. All the market data needed to analyze
an individual market technically—price, volume, open interest—was provided by
the market itself. As many as 40 different technical indicators—on balance volume,
moving averages, oscillators, trendlines, and so on—were applied to the market along
with various analytical techniques, such as Elliott Wave theory and cycles. The goal
was to analyze the market separately from everything else.
Intermarket analysis has a totally different focus. It suggests that important
directional clues can be found in related markets. Intermarket work has a more
outward focus and represents a different emphasis and direction in technical work.
One of the great advantages of technical analysis is that it is very transferable.
A technician doesn't have to be an expert in a given market to be able to analyze
it technically. If a market is reasonably liquid, and can be plotted on a chart, a
technical analyst can do a pretty adequate job of analyzing it. Since intermarket
analysis requires the analyst to look at so many different markets, it should be obvious
why the technical analyst is at such an adv.