VantagePoint AI Market Outlook for the Week of April 13, 2020
VIDEO TRANSCRIPT
Hello everyone and welcome back. My name is Greg Firman and this is the VantagePoint AI Market Outlook for the week of April the 13th 2020. To get started this week, we’re going to begin with the dollar index, which we normally look at first here. Going back into last week’s video, weekly AI Market Outlook, again this is a market outlook, not a market recap. What we talked about in last week’s AI weekly outlook are cycles in the dollar. When the cycle in the dollar usually ends, the strength in the dollar is after the week after the non-farm payroll numbers, so there’s real money demand.
U.S Dollar Index
US Dollar Index
When we look at the VantagePoint indicators here, you can see that I’ve drawn that on here. When we go back to starting, what I had stated in last week’s weekly outlook is that the dollar is likely to weaken midweek, or on the Tuesday of the week. So when we look at this and calculate that particular forecast from last week, again this is all video recorded, we cannot go back and change things or go back in a recap and say, “Well this is what happened last month or last week or last year.” This is not that type of video guys. What I try and do is help the group out by saying, “Okay, there are clear cycles in the US dollar. The predominant theme in the Forex market is buying or selling US dollars.” So we monitor the dollar index to see when they are buying and when they are selling.
When we look at this, if we were shorting this at the beginning of the week as suggested in last week’s weekly outlook, we can see that the dollar index is down 1.6% in those four days. On a single contract $1,631, on five contracts 8,150. The tricky part now comes in here guys, is that we move into the middle of the month. What is the dollar likely to do here? The immediate signal is bearish. However, what we have to look at and be mindful of is there is a lot of noise in the market right now that we cannot disregard. When the US economy starts to fire back up, this is going to have an impact on equities, on stocks, on commodities like gold, all of these things will play into this. So we have to see on this news what the administration plans on doing here, when are they going to open up the economy again?
Right now the dollar is suffering mid month. We can see that the neural index is following this move the entire week. The RSI falling, and again, when we look at our key level here, if we click on our F8 in our VantagePoint software, we can assess the breakdown below that predicted moving average was the catalyst to start to send the dollar lower.
Gold
Gold
When we look at gold this past week, again gold moving up on that dollar strength. So once again, if we look at buying gold based around that inner market correlation on a five day basis, our single contract for, again the beginning of the week, and 90% of our trading here guys is week to week despite what we hear the talking heads on TV and that saying, but the fact of the matter is that gold is up in that four or five days of trading based around the VantagePoint forecast. We can see that the neural index is completely in support of this particular trade.
Single contract nets you 12,900. Five contracts, that’s a very big trade, I don’t endorse that unless your account size warrants that, but that’s $64,000 in one week trading gold based around this VantagePoint signal. That’s more than impressive here guys. The one thing I will warn here, coming into gold for next week however though, we do have some resistance up here, and again, nothing goes straight up and nothing goes straight down. So if the US economy starts to fire back up, that may soften gold a little bit here, so again, we’ve got to watch the news.
S&P 500
S&P 500 Index
When we look at our stocks for next week, again, another fantastic call here from VantagePoint as we’ve moved higher. However, what we’ve got to be, again, very, very cautious of next week, what I will advise everybody here is that there is a very, very powerful correlation between the S&P 500 and certain currencies, particularly the Japanese yen. If we look at the Japanese yen, in my respectful opinion, this will be a deciding factor as to which way the S&P 500 is going to go.
Remember we’ve got a bank holiday on Monday, so we’ve got to take it easy on Monday, monitor the market on Tuesday and Wednesday. But dollar yen, as stated in last week’s weekly outlook that last week would be the week to start shorting dollar yen, that saw the dollar yen move down 108 pips. That’s basically just under a thousand dollars on a single contract. Five contracts nets you five grand. However, the bigger thing we want to watch here is if the dollar yen continues to fall, that would likely be a trigger to warn us the S&P 500 is going lower also.
For our Forex traders and our equity traders for next week, you want to watch this level around 108.65 very, very closely all week long. If dollar yen cannot get back up above that, then that would tell me, looking at the S&P 500, it would suggest we could be bracing for a failure. Again, it will come back down to if we get some dates, is the US economy going to fire back up on May 1? If it does, that should keep a floor under the equity markets, but if they don’t have a date as to when things are going to start back up again, then that’s likely going to be a problem.
Crude Oil
Crude Oil
With oil going into next week. Again, oil desperately trying to move higher, OPEC cutting back production. But there’s just so much supply and so little demand at the current time as the global economies are shutdown, it’s difficult for oil to make any kind of move here. Now we’ve come up, but again, oil will also be dictated by that S&P or the global indices. If those indices start moving up, that may give oil the boost it needs, but for now guys, it’s still looking rather bearish.
Euro/USD (EUR/USD)
EUR/USD
When we get into our Forex pairs, again going back to last week’s weekly outlook. What was suggested for this past week’s trading was what I had suggested, again, was that the dollar was likely going to follow its normal cycle, and the demand for dollars would probably run out early to midweek of this past week. That’s come to fruition. We can see that the Euro US, again, despite the talking heads telling us that the Euro US is going lower, it did not, it went up. So when we look at this right now, a single contract here nets you 1,677, or on five contracts, $8,385.
We’re up against a very significant resistance level now, 109.42. We need to monitor this level to see if we can continue this week to push higher here. My optimism on that remains heavily guarded. I think the currencies will go sideways as we await the announcement from the administration, whether the US economy is going to start going again. If it does, that would likely push the Euro US back down. The additional level we can watch here is, again, this blue line, this VantagePoint predicted moving average, using it as a pivot area. All of our support here guys, is sitting at the 109.04 area. If we can hold above 109.04, then we have further upside, but again, we’ve got to be very cautious. We’ll be watching the neural index very closely. We can further assess here that, as we put a bottom in on Euro US last week, when the neural index turned from red to green, that led to the Euro moving higher. These are the kind of things we want to look for.
U.S. Dollar/Swiss Franc (USD/CHF)
US Dollar/Swiss Franc
The same thing, in my respectful opinion would apply to US Swiss Franc, what I had stated last week on that dollar weakness. So if we go back and we count five days back, even if you just take the open from Tuesday, what I had discussed, and we look at the sell off and the dollar index, based around, again, the lack of dollar demands after the payroll number, we see again 148 pips guys. In the Forex market on a single contract that’s $1,533. Five contracts, very large trade again, nets you 7,665. Very, very nice move.
Where do we go from here going into next week? The signal still is pointing down, but again, the dollar will start to make gains if we get an announcement that the lockdown is coming to an end. If we get a date when the US economy is firing back up, that should help the dollar. So by mid to latter part of next week, we would potentially look for dollar strength. What we will look for is the dollar index to turn from red to green, which would be our first trigger, then we would look for the market to come back and retake the 96.21 area. This long predicted, this predicted moving average. While we’re below it, we’re short. If we can get up above it and stay above it, we go long at 97.21.
British Pound/U.S. Dollar (GBP/USD)
British Pound/US Dollar
When we look at the additional Forex pairs here with the pound dollar. Once again, even though the pound looked very ugly last week, what I had stated in last week’s weekly outlook, again an outlook not a recap here guys, is that the dollar is likely to weaken. When we say that, we’re looking for places of value to sell US dollars, the pound dollar being one of those. As the pound started to bottom out, we can see that the neural index goes from red to green, and that sets off a move again of 307 pips. A single contract $2,469, a fantastic move if we know what we’re looking for.
The neural index also, taking the correlation of 31 other markets when it forecasts the target market, shows up, those other additional markets are actually turning from bearish to somewhat, somewhat bullish. The pound also has very, very significant resistance at the 124.80 mark, so if we break above this, we need to hold above 124.80. Right now it looks like we’ve got a shot at that, but if we cannot break through this VantagePoint verified resistance level at 124.80, then we are likely heading back down. The additional area again, that you want to watch, this key pivot area 124.03. If we are still looking to buy at this level, either way guys, we want it pulling back to this area before we even think about going long. A breakout play from 124.80 could be a bull trap, so just keep that in mind.
U.S. Dollar/Japanese Yen (USD/JPY)
US Dollar/Japanese Yen
With the dollar yen again, I’ve already discussed that here, our sell from last week did quite well. This is a determining pair, in my respectful opinion, for the next week or two, but particularly next week. If there is any word that the US economy is not going to reopen, this will not benefit stocks and it will not benefit the dollar yen pair. Both will go lower, so keep an eye on the level that I had previously mentioned at 108.65. As long as we’re holding below that, then shorts are not only on the table for dollar yen, but potentially we could be pointing towards a failure on the S&P 500.
U.S. Dollar/Canadian Dollar (USD/CAD)
US Dollar/ Canadian Dollar
With the three main commodity currencies, US CAD again. Even the Canadian dollar was beating up on the US dollar last week, which is really shocking considering the Canadian economy. But again, if we’re shorting that, on Monday, Tuesday at the beginning of the week with what I had suggested about the cycle on the dollar, the dollar CAD dropped 324 pips guys. $2,325, five contracts 11,625. But now as you can see, we’re hitting a very, very powerful verified support level that’s coming in at 139.22. What I’ve also advised people on the AI Market Outlook, and on the VantagePoint Live Trading Room, and my own direct clients, I’ve told them all the same thing, dollar CAD is a very dangerous pair to trade on Monday. Often what it does on Monday, it does the exact opposite on Tuesday, Wednesday and Thursdays. If the US CAD is going to reverse higher, it’s going to be this coming week. Now again, watch for a bear trap below 139. We need to stay below 139, and close below it, in my respectful opinion, for at least two days.
Aussie/U.S. Dollar (AUD/USD)
Aussie Dollar/ US Dollar
The same would apply to Aussie US and New Zealand. This previous week, if we’re looking at places to simply sell US dollars, this is a great pair to do it, but we need that support from the VantagePoint indicators. If we look at the shift from red to green, the simple color change from red to green, and the neural index staying green the entire week, we can see the market climbing higher. That’s a pretty big move guys, for Aussie US in one week, 366 pips. 5,771 on a single contract, 28,855 on a five contract basis guys.
New Zealand/U.S. Dollar (NZD/USD)
New Zealand Dollar / US Dollar
This is what makes the Forex markets so lucrative. The biggest financial market in the world. If you combine all of the stock markets, all of the commodity and futures markets, together would be one 10th of the $5 trillion a day Forex market. So again, very easy to trade if we know what we’re looking for. Not that trading is easy, I’ll take that back. Trading is not always easy, usually it’s never easy, but if you know the rhythm of how the currencies work, and then utilizing the VantagePoint indicators, it can be extremely powerful.
When we look at New Zealand US, the same trade virtually as Aussie US, but you can see we’ve put a base in here. But again, with both Aussie and the New Zealand and the CAD guys, what we have to watch here in this current environment is the S&P 500 and the global stock markets. If the global stock markets tank based on the economy being shut down longer, then that is not going to bode well for the Aussie, the New Zealand or the CAD. It will strengthen the Swiss Franc, it will strengthen the yen. The dollar will likely strengthen along with that. So again, we’ve got a very, very busy week ahead of us. With that said, this is the VantagePoint AI Market Outlook for the week of April the 13th 2020.
