WSJ FedEx

http://www.guerillastocktrading.com/business/fedex-shares-rally-as-views-lift... Being a technical analyst, occasionally you see things that you question why have more stock traders not seen or considered this?

For example, Fed Ex.

Fed Ex is a impressive future price forecaster for the S&P 500 and really the whole U.S. economy.

In October of 2007, Fed Ex plummeted and did a cross under the S&P 500. That move down led the S&P 500 by 2 months. In other terms, Fed Ex predicted the nose-dive in the S&P 500 by 9 weeks.

In this episode, I study 8 years worth of data on both Fed Ex and the S&P 500 to show you the relationship involving both of these stock charts.

The stock charts illustrate that when Fed Ex is above the S&P 500 and leading higher, it offers a very bullish signal not only for the S&P 500 but the entire U.S. economy. Whilst the S&P 500 is above Fed Ex and Fed Ex is leading lower, this gives a extremely bearish signal for stocks.

Looking at June of 2009, Fed Ex started leading the S&P 500 higher. What is very interesting is that when Fed Ex leads the S&P 500 by a sufficient amount to create a good gap, it is yet more bullish for the stock market. Hence you can measure the gap between Fed Ex and the S&P 500 to assess bullish outlook of stock traders as well as current health of the U.S. economy.

The gap between Fed Ex and the S&P 500 narrowed at the first part of April 2010 before the Euro crisis hit mainstream news and the S&P 500 plummeted 2 weeks later.

In June of 2010, once again, Fed Ex started to gap ahead of the S&P 500 and that big gap still is there today. This big gap forecasts an upward future price move for the S&P 500 soon.

On July 26 2010 Fed Ex upped its earnings outlook for the fiscal first quarter and rest of the year, with the shipping Goliath saying express and ground volumes have been higher than expected.

The reason behind why Fed Ex is a impressive future price forecaster of the S&P 500 and in truth the entire U.S. economy ought to be obvious. As commerce and trade improves, shipments go up. For you Dow Transports theorists, Fed Ex is what trains were to the U.S. economy a lot of years ago. Obviously we do not use trains like we use to any longer but instead transport companies like Fed Ex.

A great example of how Fed Ex is caught up in everything can even be applied to a diverse sector such as property management. When banks start to loosen credit and commercial buildings start to sell, property management services are vital. Mortgage payments need to be made when enough rents are collected. The mortgage payments are then paid by checks via overnight Fed Ex. This is merely one example of how interconnected our economy is and how no matter how diverse a business is, it is tied to Fed Ex in someway.

Category:

Education

Tags:

• wsj fedex
• finance
• economy

[Awildwildworld]

really interesting video, learned something today