VantagePoint AI Market Outlook for the Week of February 3rd, 2020
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 February the 3rd 2020.
U.S Dollar Index
Now to get started this week, we’re going to begin where we always do with that very important US dollar index.
Now with the dollar index, we can assess here the dollars coming off the week, some profit-taking a good week for the dollar, but on Thursday and Friday, we start to pull lower. Now, the main thing we want to look at is we’ve breached the critical VantagePoint level of 97.37 but an even bigger area that we want to watch is this long-predicted moving average. As long as we’re holding below 9756, the dollar would remain under pressure.
Now, this is maybe a little bit early. The dollar in my respectful opinion, looking at that monthly cycle usually weakens after the non-farm payroll numbers. I’m not really looking for a big sell-off this week in the dollar index, but I am still looking for a bit more down pressure, but basically flat ahead of the non-farm payrolls. When we look at the predicted differences, they’re pointing lower. Our neural index is down and our predicted Mac D getting ready to cross the trigger, but it hasn’t crossed yet, but we do have momentum on Friday building to the downside.
Again, in my respectful opinion, this has more to do with the Coronavirus wreaking havoc on the markets. Not just on people’s health, no pun intended there, but again companies in China are shutting down some of the banks. So this is affecting dollar demand. Things are a little bit out of sorts here and that would bring me to gold.
Now, gold has made a good strong move up the entire month of January. Two of the best investments in my respectful opinion only, again in 2020 have been Bitcoin and gold. The S&P was doing pretty well, but gold and Bitcoin are solid trades this year so far. Now, when we look at this, we’ve got a little bit of a problem now.
We’ve got a significant resistance area at 1594.00 but an even bigger verified resistance level at 1613.00. Now you’ll remember we only went up there for one day in gold and the day we went up there it was when we had the conflict between the US and Iran. Gold immediately retreated when that settled. If things start to settle down with the Coronavirus, I think that gold will back off a little bit, it will still remain firm on the year.
When we look at our key daily pivot area that we want to watch next week, 1580.00 so it’s going to be a tall order for gold to hover above that area. Particularly when we can see that we’ve got the medium-term crossing, the longterm predicted difference. Our predicted Mac D is flat, but our RSI is saying we still have a little bit of momentum at least so far.
Now, when we look at the stocks, I talked about this in last week’s weekly outlook that the trigger here in my respectful opinion, was when we broke down below this predicted moving average. We’ve come back up and retested that key VantagePoint level multiple times this past week and then really selling off on Friday.
Once again here, guys, my optimism on a big move down in stocks remains heavily guarded because this is all Coronavirus type moves. It’s not because earnings are bad, it’s not because there’s a lack of demand for stocks, or the economy is going into a recession. When we weigh in those fundamental factors, the Coronavirus is creating a little bit of havoc in the global equity markets, but if they get this virus under control, I believe the S&P will turn higher.
Light Sweet Crude Oil
We’ll watch and see how this one plays out, but when we look at the direct inner market correlation to again, to the equity markets would be crude oil and there’s no mistaking this signal. Now we’ve done this in the live training room also, a fantastic signal here. You can see how the market is constantly banging up against this VantagePoint predicted moving average. One could trade solely off this blue line alone, combining the neural index and a couple of other key indicators.
We also want to assess that we want to avoid trading off of signals that are based around accumulation distribution, overbought, oversold because the market it’s a quantitative algorithmic-based market. It doesn’t look at those things. It’s looking at momentum in the market. It’s looking critical support and resistance levels and you can see when the market comes back up and checks these levels, it then sells off again.
We’re looking this week and this goes for Friday too. We came right up on to the long-predicted at 53.17 on Friday to the number and then failed. We do have some fairly strong support down here. I will point that out, which I would not underestimate and that level is coming in at 50.68. Now, this could be a bear trap shorting down here. Again, be very cautious but right now the indicators are not overly supportive of any long trades.
Now, with the weekly outlook, I think I do need to bring Bitcoin in. There’s a lot of traders out there like Warren Buffet or Investment that are not really taking Bitcoin seriously. They’ve been very vocal about that. I am absolutely not in that camp. I think that I overlooked Bitcoin in 2019 and I’m not willing to do it in 2020.
Again, Bitcoin, despite what you hear from your Warren Buffets and these so-called market gurus. Bitcoin was one of the best investments in 2019 and already out of the gate in 2020 based around when we can see back here when Bitcoin actually opened. I’ll just show you guys here, which is back here around January the 1st.
Down around January the 1st, we were sitting around 7160.00 we’re now up at, we’ve hit 96 multiple times. Now, the one thing I will point out here, you can see this verified resistance coming off the high and this high goes back to the November 4th high where the market has failed two days in a row. Again, we’ve seen serious demand for Bitcoin through Bitcoin Futures.
Particularly against the US dollar and if we’re coming into a period of known US dollar strength towards the end, or known US dollar weakness, excuse me, towards the end of the week. Then we would be looking to buy Bitcoin on a potential pullback here.
Now, once again, when we look at the exact same strategy regardless of the market or the asset class you’re trading. The same trading strategy is very effective. We’re coming down banging into this blue line, this predicted long moving average and the market’s bouncing away from it because the majority of the predicted indicators are saying that Bitcoin is going higher. We naturally looked for a pullback to buy.
Right now again, I’ll just say that I’m not in that camp that where people are saying that, “Bitcoin is a scam, don’t invest in it.” There are multiple ways to invest in Bitcoin through Futures, through trading it against the US dollar or something like GBTC. The Bitcoin Trust in the ETF side, all have done very, very well.
Euro/U.S. Dollar (EUR/USD)
Now with Euro going into next week, the Euro has had a big move up on the equity selloff. We see the Intermarket correlation there. S&P 500 down, Euro US up. You want to know these inner market correlations because they’re very important. Now, we’ve cleared a big level here at 1.1075. The medium-term crossing, the longterm predicted difference gave us a warning sign down here that the Euro was going to move higher. Again, I think it’s a little premature.
I don’t think the Euro is really going to sell off hard or isn’t excuse me, it is not going to really rally hard until after the non-farm payroll. We need to get that payroll number. The economy in the US never seen it this strong. Very, very good. Again, not as strong. It’s difficult to make the fundamental argument to be buying the Euro currency right now, but we go through these monthly cycles guys and we just want to play that.
Right now we’re still showing that the Euro is holding gains but to begin the week, 1.1048 is the key pivot area. Watch that area like a hawk. If we slip back below that by Tuesday, then shorts are back on the table at least for the coming week because again, in this particular outlook it is a true outlook because the market is closed when I’m making this video.
These are all predictions that are being made before the market even opens on Sunday night. You want to keep that in mind. Also, and adjust accordingly with your own trading.
U.S. Dollar/Swiss Franc (USD/CHF)
Now, with us Swiss Franc, again, just too much. The equity markets selling off just money goes into the yen, into the Swiss Franc, and in most cases into the US dollar.
So this pair taking a hit, we’re moving lower, but here’s my concern with both dollar-yen, and US-Swiss Franc. I believe they’re getting ready to turn back up to the upside because the market is overreacting to this Coronavirus. Again, only in my respectful opinion. If this virus gets under control, money will come back out of the yen and the Swiss Franc. It will go back into things like oil, potentially oil. It could go back into equities. These are just things to think about here guys, all right.
The market is responding to all the media headlines and we know the media is a little bias these days, to say the least. So we want to be careful with that, but for now, definitely still bearish. Again, it is dependent if there are any new developments on the Coronavirus.
British Pound/U.S. Dollar (GBP/USD)
Now, great Britain US to start the week, of starting the week with independence. We have the official Brexit has taken place now, but this is going to be a long, hard road for the UK. Now they have to cut trade deals with the European Union. I don’t think we’re out of the woods here just yet. We’re up against a very stiff resistance area.
Now again, that resistance one could argue goes all the way up to one 1.3156. That’s pretty much a given up in around this area, but again, that’s 1.3514 excuse me. The immediate resistance zone is coming in right in this clustered area right here. That level would start at 1.3284 and it trails all the way down to this particular level here. Which would come in at or about the 1.3170’s.
We want to be very cautious because again, the US is still firing on all cylinders here. Usually, the dollar strengthens going prior to the non-farm payroll and sells off afterward. We want to keep an eye on these things very closely, but for now, be a little cautious of a bear trap.
If we can get above 1.3284 then I think we should have a free run-up to the 135 area, but I don’t think that that’s going to happen overnight. There are still some bear signals in there with the UK economy. Now, the Bank of England did come out on Thursday. Governor Carnage, his real name is Carney, I call him Carnage. I know a few other people do because every time he opens his mouth he causes carnage.
He’s gone from the Bank of England. I personally again, feel that this is a good thing for the British pound. Governor Carney was the former Bank of Canada. I’m domiciled in Canada. I know this guy. He wreaked havoc on the Canadian currency. He’s done very similar to the British pound. So now he’s gone. The British pound may settle down and I think we may have a pretty good year going forward with the pound.
Again, what does concern me is we don’t have a trade deal between the UK and the European Union. We’ll play it day by day on this pair, but right now very significant resistance up to 1.3284.
U.S. Dollar/Japanese Yen (USD/JPY)
Now again, as I mentioned with the dollar-yen pair. The dollar-yen pair, this one didn’t happen overnight. Where most people are saying, “That is just simply not factual.” If you go back and look at this weekly outlook, I talked about this in last week’s weekly outlook and said, “Look, this is, we’ve closed down below this level. It looks like the dollar-yen is turning quite bearish.” We had our medium-term crossing our longterm predicted difference that was way out in front of this sell-off.
This is the benefit of using predicted indicators, not standard conventional indicators like Elliot Wave, Fibonacci. Some of these things can be effective, but we need to look at the correlated markets and the predictive indicators help us do that. Based around the correlation of 31 other markets but it is. It’s certainly a talent to read these indicators where we just have to look at them and say, “Okay, we’re no longer holding above this blue line, this predicted moving average.” That set off a fairly substantial selloff from the 110 area all the way down to where we’ve closed on Friday at 108.33.
Now, very strong support coming down here. Again, if you’re trading this pair, the trick is to watch the equity markets, the global equity markets very closely. If they turn around, money will come out of the yen and go back into the dollar. Same as the US-Swiss Franc. These are key things that I’m mentioning here. Again, if the S&P turns around Tuesday and Wednesday, then dollar-yen, the buyers are going to come out probably around this low area of 107.65.
U.S. Dollar/Canadian Dollar (USD/CAD)
Now, with our three main commodity currencies starting with US CAD, we’ve cleared some hurdles here, but some decent numbers coming out of Canada on the GDP side on Friday. Which I think will help boost the Canadian dollar a little bit. Maybe the Canadian economy’s coming around a bit. We have substantial resistance up to this 1.3321 area.
Shorts are slightly favored and that’s because we’ve got our medium-term trend weakening against our longterm trend. We’re just waiting for the neural index to turn red from green and that will trigger us to short, but I would imagine that it would be more than reasonable to look for a short around 1.3266 on Monday or Tuesday of next week because again, we have a reason to short here.
The medium-term trend is weakening against the longer-term trend, which usually when we get near a verified resistance zone, would suggest a reversal. Now keep an eye on commodities. The problem is we’re going to need oil moving back up to help the Canadian dollar, but what will help the Canadian dollar is if stocks turn around. We’ll be keeping a very close eye on that, but either way, as you can see on a daily basis this market is in constant contact with the VantagePoint predicted moving average.
Many times what I will do is I will use that blue line and target my limit orders around this long-predicted moving average, but this moving average is based around the correlation to 31 other markets. While it’s doing that, I’m saying, “Look, if we’re above it, we’re long, we’re below it, we’re short, but the further we move away from it, the more likely it is we’re going to retrace back.” Our retracement point to start the week will be 1.3196.
Australian Dollar/U.S. Dollar (AUD/USD) & New Zealand Dollar/U.S. Dollar (NZD/USD)
Now, with the Aussie in New Zealand, but particularly the Ozzy US pair, it has a very high correlation to Euro US. Now, if the Euro US is a true move and it breaks higher, it is likely going to take the Aussie US pair with it. As it stands right now, we’ve moved a significant distance away from the critical VantagePoint T cross long at 0.6816. When we click on our F eight our weekly starting point is 0.6744. If we close above 0.6744 we want to get longs on the table right away.
We want to monitor the global equity markets. We want to monitor Euro US if we’re trading Aussie US because there’s about an 85% correlation between these two currency pairs guys. It’s not just one trade. We could have two very good trades if the Euro first confirms that it is going higher. In my respectful opinion, it is not done that yet, but when it does, we can jump on this too.
Again, 0.6744 we’re looking for our indicators to start to roll over to the long side. The medium-term cross and the longterm predicted differences doing that now. The RSI, the predicted RSI, is sitting down at a lowly 4.9. It doesn’t have a lot of room to go here, does it?
Now, the last time we got down to this level, it was 12. We haven’t even in the last three months, the RSI has never given a reading that low. We’re grossly oversold, but the fact remains guys, that doesn’t mean it has to go higher. If the Coronavirus takes hold and it spreads further, it’s going to put more pressure on the Aussie. We’ve got to be cautious with that, okay.
The same thing is going to be applicable to the New Zealand dollar. We want to watch the New Zealand dollar very closely. We’re moving into a strong verified support level that’s coming in at 6403. Watch for potential longs down around that area of mid midweek or the latter part of the week.
We’re expecting dollar weakness basically about seven to eight days from now, but it could come sooner. We’re going to watch these levels very closely. Keep a very close eye on the Coronavirus updates so we can weed out to see if things start coming back to normal. Again, this is just a bit of a media frenzy around the Coronavirus.
Let’s see if they get this thing contained next week and we can get trading back to normal. So with that said, this is the VantagePoint AI Market Outlook for the week of February, the 3rd, 2020.