Monday, January 25, 2016

UPS United Parcel Service Weekly Chart 20/50 MA Cross Holding on to Cyclical Bull Market

Another key cyclical market signal is the UPS 20/50-week MA cross. If the 20-week MA is above the 50-week MA for global bellwether United Parcel Service, the economy is in great shape, the wine is flowing like water and shipping activity is robust. Parts are shipped to manufacturers and business contracts fly to counter parties in overnight bundles. Busienss is good. Stocks typically trend higher.

But the party was over in May of last year when the 20 MA stabbed down through the 50 MA ushering in a cyclical bear market pattern. The central bankers are powerful, however, so more dovish jawmoning and easy money stimulus from the Fed, ECB, BOJ and PBOC creates more stock market joy and UPS catapults higher as investors expect shipping activity to pick up especially into the holiday season. That did not happen.

Price is collapsing but note that the 20-week MA remains above the 50 signaling bullish markets ahead so the bulls must be shown respect. If the 20 MA falls back under the 50 MA, it is over for stocks. The chart above can be played against the previous NYA 40-week MA cross chart that is currently bearish. For intermediate and long term investors, you want to see the NYA recover above the 40-week MA to prove that a solid multi-week perhaps month rally is in progress and on tap ahead for stocks. If you are bearish, you want to see the 20 stab down through the 50 in the UPS chart above which will signal market carnage ahead.

Pay attention to the 20/50 cross described above for UPS over the next three weeks since it is going to play a key role in determining the overall market direction forward. There is likely a battle on tap over the coming days and couple weeks and the winner will be important.  This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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