Recessionary Thoughts:
As news crossed the wire of Japan entering recession with two consecutive quarters of negative GDP growth, I thought it would be good to take a look at a couple of names that may warn us about that domestically. Below is the daily chart of FDX and it is at a critical juncture here as it tests a pattern from the late October lows. Just the fact that it has ventured this far back while many other overall names have not receded to these depths suggests caution. It is now 17% off most recent 52-week highs and since the crater week ending 12/22/23 that fell 12%, it has not advanced in back-to-back weeks. The fact that it occurred not long after a WEEKLY double bottom breakout pivot of 269.29 is even more worrisome as we know the best breakouts tend to work right away and act well POST the move. The chart of UPS, which is weaker, is now 26% off its annual peak, and its 200-day SMA is still sloping lower, the opposite of FDX. It has produced FOUR straight negative earnings reactions and has recorded a couple of big weeks of distribution following those reports down 11.3 and 11% in the weeks ending 10/27 and 2/2, and notice the bearish death cross as the 50 WEEK SMA crosses below the 200 WEEK SMA. Both these charts are speaking loudly about a possible recession here.