Overview: What is Multi-Market Correlation Analysis?
Stock index charts of developed countries tend to move in correlation. By laying out and comparing multiple markets such as the Nikkei Average, NY Dow, and Nasdaq, you can detect consistencies and inconsistencies that would not be noticed by looking at a single index alone.
This analytical method takes advantage of the fact that Elliott Wave counts are not a structure of “one country’s index” alone but a wave structure reflecting global market psychology. A count where the wave start/end timings overlap across multiple indexes can be judged to be capturing a substantial movement of market psychology, providing strong evidence that reinforces the count’s reliability.
Detailed Points
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The Nikkei Average is highly correlated with the NY Dow and Nasdaq, and wave start/end timings often overlap
The Nikkei Average is highly correlated with the major US indexes — NY Dow and Nasdaq — and the phenomenon of wave start and end timings overlapping is often observed. This is thought to be because developed markets are influenced by common economic environments and investor psychology.
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When counting the Nikkei Average, US stock index charts often provide important clues
When you are uncertain about the Nikkei Average’s count, US stock index charts (NY Dow, Nasdaq) often provide important clues. In cases where the wave form appears more clearly in the US market, you can use that as a basis to organize the Nikkei Average count.
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When the duration of cycle-degree corrective waves overlap across multiple indexes simultaneously → the reliability of the count rises
If it can be judged that the duration of cycle-degree corrective waves overlap simultaneously across multiple indexes such as the Nikkei Average, NY Dow, and Nasdaq, the reliability of that count rises significantly. Multiple independent markets showing the same wave structure provides powerful supporting evidence.
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Confirming consistency across different markets provides strong corroborating evidence for counts
Counts of a single market easily fall into subjective judgment, but by confirming consistency across different markets, the objectivity of the count can be improved. This can be used as strong corroborating evidence in count verification.
Related Terms
Summary
Multi-Market Correlation Analysis is an analytical method that confirms the consistency of counts and pinpoints turning points with higher accuracy by comparing multiple markets such as the Nikkei Average, NY Dow, and Nasdaq.
Stock index charts of developed countries tend to move in correlation, and counts where the wave start/end timings overlap across multiple indexes become more reliable. Confirming consistency across different markets can be used as strong corroborating evidence that improves the objectivity of counts.
