UPS United Parcel Service Weekly Chart 20 and 50 MA Cross M Top

One of Keystone's cyclical indicators is the UPS 20 and 50-week MA cross.  Shipping is a key indicator of global economic health; if lots of parts, products and paperwork are moving to and fro, the economy is booming, instead, if the UPS guy is spending time during the day to drop off his short pants at the cleaners, followed by sitting in SBUX all afternoon, with nothing to deliver, then the economy is in the tank.  Use the 20 and 50 cross on the weekly chart to help gauge this premise. 

The market top occurred in October 2007, UPS was already stumbling lower to sideways indicating the economy was in trouble. The 20 stabbed down thru the 50 in October 2006 indicating economic trouble ahead, briefly recovered just as the market topped in Fall 2007, then crossed lower again in early 2008 to indicate that major trouble is on its way.  Of course the crash occurred Fall 2008.  In March 2009 the markets bottomed as word of stimulus, QE3 hit the markets, and the love affair with easy money crack cocaine stimulus was born.  The 20 crossed above the 50 in summer 2009 to verify the long bull rally ahead.

Last summer the 20 fell down thru the 50 again as global and U.S. shipping languished. This prompts the Fed and the ECB to save the day with Operation Twist and LTRO 1 and 2, respectively, and the 20 moved above the 50 to start this year signaling the bull rally ongoing and continuing.  The 20 is now curlingover and heading down so watch the cross closely especially over the next month.  A cross of the 20 down thru the 50 is very ominous for markets in the short, intermediate and long terms.  Note the M Top that printed this year.  Price made a matching high but note the drastic negative divergence that created the smack down ealier this summer.

Note the low print with the MACD line in March 2009 that was never resolved. This indicator wants to see a test of the March lows some day in the future. Watch this chart closely moving forward and it is updated on the Cyclical Signal page on this site (look at the list in the right margin), especially if a long term investor. If the 20-week MA fallls thru the 50, and you are an investor for the long-term, you will lose a lot of money. 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.