Index Intermarket Analysis
Index correlations can reveal turning points when they diverge by large amounts from each other. The 3 main Indices in the US markets are DJIA, S&P 500 and the Nasdaq, with the Russell 2000 as the fourth important Index. Mostly, Indices are correlated in their price action, but when two of the four diverge significantly from the others, this can be a warning sign of reversals in the markets.
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