VantagePoint AI Market Outlook for the Week of December 28, 2020
U.S. Dollar Index
Hello, everyone and welcome back. My name is Greg Firman, and this is the VantagePoint AI Market Outlook for the week of December the 28th, 2020.
Now, as one of the final presentations of the year, of course, we’ll have one more to start the new year at the end of this week, we can see that the dollar here remains under pressure. It’s desperately trying to break through this key VantagePoint TCross long at 90.65. We are unable to do that.
Now in my respectful opinion, we are likely to break through this area after we get through holiday trade. I don’t advise to put a lot of trades on during the holidays between now and January 1st. We’ve got very thin, very illiquid markets, but the key levels to watch this week is again, 90.65. If we can break through that, then the dollar trend here could potentially reverse. We’re hovering down in this lower area, around 89.64, but we keep bouncing away from this.
Now, if we pushed down below here, the dollar is likely to make another run lower, but in most cases, when real money comes back into the market in January, the dollar will move back in towards it’s monthly cycles, where we see strength in the dollar between the end of the month and into the eighth or ninth of the new month. That’s basically the way we would look at that.
Now, our additional indicators we would look here from the dollar is, again, using the predicted moving average by itself, we’re looking for the market to hold above 90.27. If we can continue to hold above 90.27, then we will challenge that secondary level. And that will point towards a reversal.
We can assess here again, using the RSI a little more effectively. If we’re looking for a breakout for the RSI to hold above the 50 and above the 60 level, that will indicate a more bullish momentum in the market. Now, with this dollar weakness, we can see that gold is rebounding. It’s trying to push higher. We’ve had a slightly higher high here, putting up to about 1912. That particular number there is a suspect in most of the trading platforms. I’m only seeing around 90 1904, but we’ll go with this on the continuous contract size.
We’ve made a slight push higher, but again, when we look at the TCross long, 1868. If the dollar can recover in January, then that will likely be the end of the current gold rally for a little bit. I don’t expect gold to fall down to $1000 an ounce or anything like that, but I do suspect that it’s going to get tired up here. As the vaccine kicks in, the risk on environment starts to come back on, we should see gold separate with the current correlation to the S&P 500.
Now again, watching the key levels, 1868, when we click on our F8 in our VantagePoint software, we can see, using the blue line itself, the market is really struggling to hold above this blue line. Our predicted differences are basically flat, but our MACD is trying to push higher, as is the RSI. So, we’re likely to see gold remain firm going into the end of the year but at the start of the year, that is what we really want to focus on with gold.
S&P 500 Index
Same thing with the S&P 500 here, guys. The S&P 500 continues to relentlessly advance. And again, with the fed more or less permanently on hold by the sounds of it for quite some time, this should prop up the stocks. My concern here is that usually January, February, not overly great months for the stock market, this year could be different. But when I look at this, again, we just focus on the key levels. We’re long well above 3664. When we click on our blue line by itself here, we can see we’re, again, we’re struggling to hold above this blue line, 3688. Now, that I believe is the level that the S&P came down to today.
We’re running a little bit late on the VantagePoint AI weekly outlook this week, just to give you guys a head up, there was some corruption in the data. That’s why this wasn’t put out on Sunday or Saturday when I normally put it out. So we had to get that cleaned up a little bit, but it’s fixed up here now. So just make sure you close your software, reopen the software so that that data issue has been corrected.
Now, again, we want to hold above 36.88. If we start breaking down below that level, then the S&P will likely go into a corrective move. That corrective level right now would be back down around, again, the 3688 mark, but also the 3660, in around the low point of 3621, I would respectfully submit. And again, the additional verified support we have down at 3596. It would be perfectly healthy for a corrective move down into this particular level.
Now, with one of my favorites here, again, I have been a very, very strong advocate for Bitcoin for probably a year and a half, almost two years now. I’ve received all kinds of nasty emails and saying that Bitcoin’s a scam. I don’t know what I’m talking about. You’re crazy buying this thing.
Well, guys, you know, that concept has been reinforced by some of the major talking heads like your Warren Buffets and all these people. But the reality is my focus is on the VantagePoint software and the signals that I received from here. Looking at the basic charts of Bitcoin, understanding that corporations are moving money into Bitcoin, looking at the fact that Bitcoin has doubled every year for the last 10 years. That is what I’ve made my decision on. Not talking heads that don’t even fully, I don’t even fully Bitcoin, let alone them. So when we look at this, we really do want to focus on the signals that we’ve seen from VantagePoint on Bitcoin. And this is not a one month rally here, guys, the original signal, and I don’t like to do this because this is an outlook, not a recap, when we look at this back here, back in October, we got another buy signal in the VantagePoint live training room. I’ve discussed this, alternative ways to get exposure to Bitcoin, GBTC on the ETF side, some of the other cryptos.
But again, this appears to be real, guys. When we broke through this critical level right here, that is one of the levels, but the big level for me was down at the psychological level of the 20,000 mark. We saw a big move up after that. So again, Bitcoin appears to have a very bright future. I would say that somewhere around the 40,000 mark is more than reasonable at this particular time, because now we have a solid base at just under the 19,000 mark. That’s what we’ve been waiting for. In most cases, if this was a false break or a bull trap here, guys, it wouldn’t keep advancing and it is. Most people will look at these and call this a double top triple top.
I’m a strong advocate against that type of strategy, because in most cases, they’re knocking on the door and they’re only going to knock so many times before they kick the door down. And that’s what the Bitcoin traders have done here. We want to remain long Bitcoin here, watch your key level, 22764, long while above that area. When we click on our F8, we can see on the F8, the long predicted 24977. Bitcoin has had a very, very significant run over just over the course of the weekend. Now everybody learns, even an old dog like me, learns a new trick once in a while. And I didn’t realize that Bitcoin was slightly different than the Forex market where it’s actually trading 24/7. There’s been a massive gap in price over the course. We closed Christmas Eve, I think around 23360, and now we’ve gone all the way, we’ve gapped all the way up to almost 28000 here today, guys. Again, focus on your charts, focus on your key levels and let that be how you will make your decision on whether you want to enter something like Bitcoin.
Now, again, when we look at Light Sweet crude oil, we’ll have a quick brief of that. I like to cover most of the major markets here. Oil holding on. Now, oil could advance further, but let me be clear, the correlation between the S&P 500 and Light Sweet crude oil is still there. And it’s a very strong one. So, if the equity markets can continue to advance, so will oil. That’s what we will watch very closely. But if the equity markets start to move lower in a corrective fashion, then you can almost take it to the bank that oil is going to follow.
That key level is 46.83, still long while above that, but again, click on your F8, bring in your predicted moving average by itself, and use it as a pivot area. That pivot area now 47.94. As long as we can hold above these two levels, then oil should advance. But again, the inner market correlation, you want to keep a close eye on.
Euro versus U.S. Dollar
Now, as we look at the Euro going into, again, I will have probably a very, very different opinion on this come on next week’s weekly outlook for the first week. I believe that the Euro is getting very, very toppy up here. I believe that the Euro rode the gold train all the way up here, and when gold moves lower, it will take the Euro down with it. So if you’re a Euro-US trader, which I suspect a lot of you are, you would watch this level up here very, very closely at 1.2273, I will respectfully submit. Shorts carry a slight edge here going into 2021, when a lot of these issues with COVID and everything else start to get results slowly.
Right now, our key VantagePoint level is 1.2134. On a breakdown below that level, that should signal a much deeper corrective move lower on the Euro. But again, getting close to the flame here. We use our blue line, our longterm crossover with the blue line only, and using that as a pivot, 1.2794. We want to see if we can close today, Monday, below this particular level. And if we can stay below 1.2194, then shorts are definitely in play.
British Pound versus U.S. Dollar
The pound dollar going into next week, once again, we’re coming up to a level where we’ve already been at here, guys. I think that Brexit is potentially behind us now, but is this now just a buy the rumor, sell the fact and the pound will continue its decline? We shall see. The high right now, 1.3624 That’s the level we’re dealing with to start the week.
However, the key VantagePoint levels down here, and again, that TCross long, 1.3431. We’re still long while above this level here, guys, okay. We’re looking for a tracement, which I believe at the time I’m presenting this video, the last time I had a little peak at this around 11, I believe, around 11:15AM Eastern. The pound was right around this particular level. So it’s going to bounce, it’s going to bounce out of this particular area right here.
Again, when we use our blue line by itself, we get an additional pivot area. That level coming in at 1.3504. It’s okay to break down below it here, guys. It’s whether we close below it, that’s the thing to watch. So watch the two aforementioned levels and if they hold and we will see the pound go higher. Right now, we’ve got our MACD supporting longs. We’ve got our predicted RSI above the 60 level. Neural index is positive. The predicted differences are making me a little nervous there because I’m not getting a clean signal out of it right now. But, again, I think buying on dips is still a reasonable play, but you’re going to have profit taking. You’re going to have thin illiquid markets this week. Do not trust price one bit on any of the markets.
U.S. Dollar versus Japanese Yen
This brings me to the dollar-yen. The dollar-yen at writing, again, is challenging the TCross long, 103.75. Very often what happens on Monday the exact opposite happens on Tuesday. If the dollar-yen turns back down, that will be a warning sign that, again, the equity markets are likely to turn down with it. So we will monitor this very, very closely, but this is the key level you want to watch. For a complete reversal on the end, we need to close above 103.75 a minimum of two days in a row.
When we click on our F8, you can see that the market is attempting that right now, by bringing in the predicted moving average by itself, we can see that pivot area very clearly. And right now that clear level is 103.53. I would argue that the market is technically long while above 103.53, but we must push through. I’m just going to round it out for everybody, the 104 level. If we push above 104, stay above 104, then the dollar yen could be getting ready to reverse. But I will share some information with you guys that the Bank of Japan, the Prime Minister of Japan is telling the Bank of Japan, my understanding it’s verified, it’s not fake news, that they are going to protect the 100 level on the dollar yen.
I don’t like the sound of that at all, because we’ve seen what has happened in the past with payers like Euro, Swiss, Franc. Very dangerous when these banks get involved with trying to control the market. The market is far bigger than a couple of central banks, and they may be able to hold the 100 level or protect it or scare us into thinking they’re going to protect it, but then the market could come roaring back and drive it much lower. So keep that under your hat and make sure you’re aware of that. But it would suggest that the Bank of Japan is expecting the dollar yen back at the 100 level. And the Prime Minister of Japan is telling the central bank, Bank of Japan, you are not to allow it to go lower than that. That is going to increase volatility. Spikes in the market, be very, very cautious.
U.S. Dollar versus Canadian Dollar
Now, when we look at the US/CAD, again, we pushed through that key VantagePoint level. Now the form of resistance, we want to see if we can use this as support. The TCross long, 1.2843. We want to watch that area very closely to see if we can stay above it.
Now, the predicted differences are starting to roll over back to the downside, but our MACD is still … Still have a crossover in our MACD. The neural index is definitely mixed, but the RSI is above 60. For now, Canada remains in lockdown. We’re going into another 28 days with this COVID stuff. So again, I don’t think that’s going to help the Canadian dollar. We’ll see if we can hold above that, but once again, when we look at our long predicted, 1.2834. We’re looking to hold above this level. You can see that we’ve had a good downtrend on here. Virtually, a daily retracement to this predicted moving average, the blue line. But then we crossed above it right there on December the 18th, and now it’s reversed. We’re now holding above it. Again, watch the 1.2834 level this week to see if we can hold above this, if so, then the US/Canada is likely to make a move to a minimum of back towards the 1.2960 area. Usually the Canadian dollar is not overly strong between January and early April.
Australian Dollar versus U.S. Dollar
Now, as we look at it, there are other two main former commodity currencies. I’m officially going to label labeled them equity-based currencies, meaning that if the S&P 500 holds its gains, then the Aussie will do well, the New Zealand will do well, and even the Canadian dollar could benefit from that. But again, for now, identify your clear level, 0.7513. That’s the level you’re watching to start the week. If we can hold above that. And again, our secondary level, we’re trying to sneak back up above here, guys, but it’s really struggling, 0.7575. Once again, if we can’t hold above 0.7575, multiple other trades will spin off of this, guys. Short the S&P 500, short Euro/US, there’s a number of different other trades.
But understand with the Forex market you’re either buying or selling US dollars. That’s what you’re doing. So if we’re expecting some dollar strength in that first couple of weeks of January, as we start to fire up into the new year in 2021, then it potentially could not be great for the Aussie. So we’ll watch the swing high, see if we can … Again, using the verified resistance support and resistance zones, it gives us the idea of where these hot zones are. Right now, that high of 0.7639, We need to get above that very, very quickly. And the easiest way for that to happen is if the S&P 500 rallies.
New Zealand Dollar versus U.S. Dollar
The exact same thing here, guys, applies to the New Zealand. We can identify our key pivot level, 0.7064. We’re running basically a little bit flat here, but the RSI is saying we’ve got a little bit of momentum building to the upside. Predicted differences are sideways, but our neural index is positive. We’re holding above and closing above our key VantagePoint level, that 0.7064.
Once again, a quick check, you can see, we’re trying to push above that predicted moving average, 0.7093, guys. That’s the number we’re looking at this week. If we can hold above this level, again, there’s a number of other trades that will benefit from that. That would mean if we hold above 0.7093 then the S&P should still be good. You should still have a risk on environment.
Again, a very mild week this week. I would strongly advise to lower position size, be very cautious on trades, because we are dealing with thin, illiquid markets.
With that said, this is the VantagePoint Market Outlook for the week of December the 28th, 2020.