VantagePoint AI Market Outlook for the Week of December 2nd, 2019
The VantagePoint AI Market Outlook is designed to help traders. It’s important to remain aware of correlations in the global markets. Traders can become more profitable if they know how to get ahead of the trends. Utilizing the predictive indicators in VantagePoint Software can help traders find the right trades and the right times. Above all, traders know when to enter and exit those trades for maximum profit. Let’s look at the charts for Equities, Commodities, and Forex Pairs.
Hello everyone and welcome back. My name is Greg Firman and this is the VantagePoint AI Market Outlook for the week of December 2nd, 2019.
U.S Dollar Index
Now to get started this week again we’re going to begin with the U.S. Dollar index but we will be covering all the major markets plus the G7 Forex pairs. Now with the dollar index, as we can see the market is struggling, the DXY futures contracts are absolutely struggling with this verified resistance zone coming in at or about the 98 30. Now we’ve had approximately five or six tests of this area so that could be still determined as quite bullish but the market is very, very nervous to be buying up around this area anywhere near 98.30.
Now the indicators from VantagePoint are mixed but again we’re coming into a data-heavy week here. We’ve got the ADP report which will be the leading indicator as to the outcome of the non-firm payroll number, we’ve got the ism, so it’s going to be a very data-heavy week. So that will likely set the tone for the dollar. Now I do anticipate the U.S. labor report to be a solid report, nothing great but nothing horrible either, so it should continue to support the dollar at least through the coming week. Now we’re going to have profit-taking, we’re going to see a lot of different things, but when we look at our key levels right now that the critical level that we want to watch is the 98 level, that T cross long.
Now if we click on the additional key VantagePoint level from an intraday perspective, 98.17 so we’re just barely closing above that but the indicators have not completely rolled over to a reversal yet. But in most cases here guys the dollar is strong into the end of the first week of the new month. Then it starts to sell off regardless of that non-firm payroll number. Now, the other thing I will point out to the dollar has had a pretty good run at least in the last six, seven months when we look at the chart here. But as you can see we are no longer making any new highs here and we’re stuck in this channel. Basically the lower end of that channel is coming in at or about the 96.96 area. I would anticipate a retest of that level towards the middle or latter part of this particular month.
Now with that same move, we can see that gold is stalling but it’s not breaking down below this critical support. That critical support level right now is coming in at or about then the 1450.00 1445.00 Area. So I would anticipate the lower end of this particular range to come in under a little bit of pressure this week but I also expect that it will likely hold. The indicators from VantagePoint are starting to slowly turn bullish again on gold and once again if we look at the longterm view between gold and the U.S. dollar clearly gold is the stronger asset class here versus the U.S. dollar.
The dollar, longterm depreciation is evident, we can see that throughout the different markets, but that doesn’t mean that every dog doesn’t have it today. The dollar is likely to hold its ground here but again we’ve got a lot of things going on. We’ve got this new China bill where the U.S. Senate and the current administration is backing the protesters in Hong Kong. That likely is going to have a negative effect on the current trade deals so I’m not looking for great things from the dollar in the coming weeks ahead, to say the least.
Now the S&P 500 continues to advance higher but guys once again the majority of this rally in my respectful opinion simply is based around rumors, hearsay, this and that. If we look at the most recent rally in the S&P 500, this goes back into I believe it was June, you can see the similarities between these two particular rallies. Number one, they both started on the third of the month. You can see that this rally started on June the third and then it had become completely exhausted by July 29th. Now, what’s interesting in this particular rally it’s almost identical, the time in which it started and potentially the time in which it ends. You can see that as we started this particular rally on October the third the exact amount of days as the previous rally. This looks that and again if we also if you’re a strong believer in seasonality that makes this current rally on the S&P 500 look even worse or it looks absolutely ripe for a very, very strong corrective sell-off if nothing else.
Now, it doesn’t mean that the trends going to completely reverse but I would say that there’s a very strong possibility that this particular rally on the S&P 500 is coming to an end. Now, when we look at those indicators from VantagePoint, to look for that needle in a haystack to see if we can see anything funny here. Right now the what I find extremely odd guys is that when we broke out past this major resistance area that was coming in at or about the 3025.00 Area this was all based around rumors that there would be a trade deal signed within the coming days or weeks. Not only do we not have a trade deal we don’t have a location to sign it. The two sides keep basically throwing rumors out there but in the end we never get even a phase one. So my optimism on the S&P 500 remaining at these levels going into year end remains heavily, heavily guarded. The probability that we sell off any day now is extremely high.
Light Sweet Crude Oil
If one is to use light sweet crude oil as a leading indicator we can see there was already a violent move to the downside on oil on Friday. Once again, when we look back at this seasonality we see that that seasonality did come to fruition the same basically almost to the day last year we had a massive sell-off. So could this be the leading indicator based around the inner market correlation that we’re looking for to tell us not to buy those equity markets? I’d say there’s at least a 50% probability that the S&P 500 follows. So keep that in mind guys. It’s not about being right or who’s right or who’s wrong it’s simply identifying some of these patterns so we can actually profit from them. That’s the whole idea in trading.
Now as we continue to monitor these additional markets Bitcoin has now started to recover. It’s taken out a bit of a sell-off there on that dollar strength but now Bitcoin’s recovering. So if Bitcoin this week can break free and clear back up above 7815.00 That would be a leading indicator. The dollar is going to come under pressure, the S&P 500 is going to come under pressure, the oil will continue to sell off and potentially it will be Bitcoin and the Euro that rally in the coming weeks ahead. So keep a very close eye on Bitcoin. It’s extremely important at this particular time for an inner market correlation if nothing else here guys. And that’s the one thing I think most people tend to ignore is these inner market correlations.
Euro/U.S. Dollar (EUR/USD)
Now when we get into our main Forex pairs here the Euro U.S. pair is basically we’ve seen or at least I’ve seen here is unprecedented low volatility in this particular pair. Basically wandering around anywhere from 15 to 40 pips a day very slow but 90% of the time a much bigger move happens before year-end. Usually, I see it the week leading up to the U.S. Thanksgiving, this year very little volatility, but we’re not overly bearish, just not yet anyway on the Euro.
Now if we can get back up above 1.1037, 1.1050 this week the Euro could reverse. So for your Euro U.S. traders watch your gold contracts very closely. If gold continues to rise so will the Euro if the equities sell-off then that will also likely cause a rise in the Euro. But again, the indicators are basically flat to neutral but the neural index is picking up on some strength in the Euro. Now we do have a very strong verified support zone coming in at or about the 1.0991 but a much bigger level down here at 1.0941. And of course, the big level that everybody’s watching is 1.0879. Now we may be able to move down to that level after the non-firm payroll but once again what I’ve seen guys based around my experience if nothing else is that whatever that payroll number is the dollar sells off midway through the next week either way. So always remember that guys, the market is usually never what it appears to be.
U.S. Dollar/Swiss Franc (USD/CHF)
Now with the U.S. Swiss Franc once again we’re coming up into an absolutely massive verified resistance zone up here that we want to monitor very, very closely. That level is, of course, the 1.0027 level. We came up to that level on Friday, kissed it and then backed away from it. We can assess here we have the medium-term crossing, the long term predicted difference, so on Monday, I would look for a move up back towards this 1.0027 and then we want to look at considering a short trade here. Now what we need for a short trade on U.S. Swiss Franc or on dollar-yen is for those equity markets to sell off so more specifically the S&P 500. If it sells off than the dollar-yen and U.S. Swiss Franc will follow it lower.
So keep an eye on that particular zone and watch your contrarian indicators in the software. The medium-term crossing the long term predicted difference, the RSI in heavily overbought territory starting to turn lower, MACD overbought, all of these indicators. The only thing we’re waiting for right now guys is for the neural index to turn from green to red and that should be the green light to go ahead and fire at will on shorts.
U.S. Dollar/Japanese Yen (USD/JPY)
Now the dollar-yen again is almost identical trade to U.S. Swiss Franc which most people don’t realize. If we look at the levels up here over the last six to nine months we can see we’re coming into a very, very heavy resistance zone. That resistance zone goes all the way up into the 111.50 area but the dollar-yen before it can even think about the 111.50 area we’ve got to break free and clear of 109.31 and the additional resistance up around 109.59.
I believe that these levels will hold. Now one of the reasons I believe that is when I look at the indicators and VantagePoint I can see that my medium-term trend is weakening against my longer-term trend. My RSI is turning down. All I’m doing is waiting for the medium term to cross the long term predicted difference which is this pink line crossing that blue line with the neural index and then we can go ahead and short. If nothing else we would at least correct down to the 108.98 area. So if we can get that moving then again that could lead to a much bigger move to the downside on this particular pair. 4.
British Pound/U.S. Dollar (GBP/USD)
Now British pound U.S. dollar is likely to remain bullish here we’re holding tight and we just keep, we’re clinging to the VantagePoint T cross long at this 1.2887 area like a life preserver here but we’ve got even bigger support down to this area that I talked about in last week’s weekly outlook, suggested longs is the better play. I’m going to stay on that side of it but the pound is likely to come under a little bit of selling pressure on dollar strength towards the middle or latter part of the week but don’t let that fool you guys. As long as we’re above 1.2768 longs are definitely in play here. We’ve cleared the yearly opening price, we’ve got good verified support, so again we’re just letting the market come down into these lower levels so we can pick it up. The indicators from VantagePoint are fully supportive of longs. We’re above the 60 level on the predicted RSI, our predicted differences are above the zero line.
Everything still looks pretty good here guys. So as long as we can hold these levels we should see the pound go higher.
U.S. Dollar / Canadian Dollar (USD/CAD)
Now the Canadian dollar to begin the week is likely to come under pressure not necessarily on Monday but on Tuesday. With that big selloff in oil that is likely to hurt the Canadian dollar so we’re going to be watching this level right now. What I would call the by zone here guys is between 1.3257 and then we have some lower-end support coming down here on this particular bar rate here at 1.3190. So watch this level between 1.3257 and 1.3190. If oil continues to sell off an equity slide that will hurt the Canadian dollar and will boost the U.S. dollar against the CAD so this is what we want to watch. Right now the indicators are basically sitting neutral but we’ll be monitoring it very closely. But the key level again, 1.3257. Don’t panic if we lose that area. Then draw your attention to 1.3190.
Australian Dollar/U.S. Dollar (AUD/USD) & New Zealand Dollar/U.S. Dollar (NZD/USD)
Now with the Aussie U.S. And New Zealand U.S. basically Aussie is just relentless selling. We can’t get any real buyers to step up here at all. We’re sliding lower but watch the lower end of this particular range. 0.6710 that’s where I think the buyers will come in probably towards the end of the week or basically about maybe 10 trading days from now depending on how strong or weak the U.S. Dollar is. But right now the Aussie is carrying a clear signal while below this T cross long at 0.6807.
Now with New Zealand, we could have even more opportunities for shorts there. This past week you can see we’ve had one, two, three, four, five, six, seven, basically about 10, 11, 12 failures up around this 0.6840. We just simply cannot break through this level. So we know where our key levels are. Our cell zone is between the high at 0.6465 and the additional verified resistance at the 0.6437 high. If we can break through both of these levels guys I am happy to buy this pair. But clearly the market is saying, “Look, this is just a corrective move in the broader downtrend.” So for now, watch those two levels that I’ve discussed because they will be made or break levels for this particular currency pair.
So what that said this is the VantagePoint AI Market Outlook for the week of December 2nd, 2019.