How to Invest Today

As a stock analyst, every now and then you see things that you question why have more stock traders not seen or considered this?

For example, Fed Ex.

Fed Ex is a fantastic future price prophet for the S&P 500 and in actuality the entire U.S. economy.

On 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 drop in the S&P 500 by 8 weeks.

In this video, I look at 8 years worth of chart data on both Fed Ex and the S&P 500 to explain to you the association between both of these stock charts.

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

Studying June of 2009, Fed Ex began leading the S&P 500 higher. Something that is certainly interesting is that when Fed Ex leads the S&P 500 by a sufficient amount to generate a big gap, it is still more bullish for the markets. Hence you can gauge the gap between Fed Ex and the S&P 500 to gauge bullish outlook of stock traders in addition to existing health of the U.S. economy.

The gap between Fed Ex and the S&P 500 narrowed in the first part of April 2010 before the Euro crisis hit mainstream news and the S&P 500 dropped 4 weeks later.

Studying June of 2010, once more, Fed Ex began to gap ahead of the S&P 500 and that big gap still is present today. This wide gap forecasts an upward future price move for the S&P 500 in short order.

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 greater than anticipated.

The reason behind why Fed Ex is a impressive future price predictor of the S&P 500 and really the whole U.S. economy should be apparent. As commerce and trade improves, shipments explode. To you Dow Transports theorists, Fed Ex is what trains were to the U.S. economy numerous years ago. Noticeably we don’t use trains like we use to any longer but instead shipping businesses like Fed Ex.

A great example of how Fed Ex is involved in everything can even be applied to a diverse sector such as property management. As banks begin to loosen credit and commercial complexes start to sell, property management services are vital. Mortgage payments need to be made when an adequate amount of rents are collected. The mortgage payments are then paid by checks via overnight Fed Ex. This is just one example of how interrelated our economy is and how no matter how diverse a business is, it is tied to Fed Ex somehow.

Live breaking news 7 days a week, 24 hours a day with links to articles from the top newspapers and websites around the world. Check out wsj fedex This article, Why A WSJ Fedex Report Links To The Entire US Economy is available for free reprint.