VantagePoint AI Market Outlook for the Week of February 17th, 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 17th, 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, as we can assess here from last week’s weekly outlook, the dollar basically not making any ground, losing ground, actually, against all of the currencies except for the euro. Now, the dollar is approaching a very significant resistance zone here. You can see that we’ve pushed just above this high here, the six month high, but in most cases, this is a bull trap, guys, so be very, very careful. We know when the dollars cycle, when the dollar is strong and when we know usually when the dollar is weak. The dollar is usually week around the middle of the month and stronger towards the end of the month in the first week of the new month, so we basically look for places of value to sell US dollars.
Now, again, the euro maybe has not been the best place, but again, the dollars lost ground against the Aussie, the New Zealand, the British pound, the yen, it’s basically lost its ground right across the board except for that euro. Now, the medium-term crossing the long-term predicted differences is warning us that, again, this could be a bull trap right above this verified resistance zone, so be cautious this week. I would anticipate further dollar weakness between now and the end of the week. Now, remember, we are in a holiday short week, so we’ve got to be cautious here, but we would also look to our inner market correlations to determine whether or not, again, the dollar is strong.
We can see that gold was a little slow midweek. You can see it bouncing here off the key vantage point level, but then we’ve accelerated higher into Thursday and Friday trading and then broke through this resistance zone. Now, I’m not anticipating a lot of gains for gold, but I think we’re going to remain firm between where we are in about the 16.50 area, so we would still be buyers of gold. Our predicted differences are rising. Our neural index is good, very little has changed here, but again, gold was an excellent investment, guys, in 2019. Indisputably. It’s been a very good investment in 2020. Again, if we’re still in a period of dollar weakness, then gold is likely to remain firm.
I would also be and continue to be, despite some of the negative comments from people like Warren Buffet about Bitcoin, Bitcoin has been basically one of the best investments of 2019. In 2020, it’s already out of the gate blowing past the S&P 500. Whether it’s a scam or not, I don’t believe that it is. I believe that the world is likely moving towards digital currencies of some kind. It may not be in the next 10, 20 years, who knows? But all I know is there are strong buyers of Bitcoin. Again, don’t let somebody persuade you. Have a close look at some of the Bitcoin investments out there, but right now I would that Bitcoin will likely advance on dollar weakness this coming week and continue to hold its ground as more and more people come into this particular asset class.
Now, when we look at the S&P 500, once again, I have to say this is one of the first time I’ve seen panic buying. Now, the panic buying I think we’re seeing is coming out of China with the coronavirus and China’s propping this market up. Now, our signal here from VantagePoint is not confirmed, but it’s warning us that this move may not be what it appears to be. I will have to concede here though that this type of buying in the S&P 500, I’ve never seen it before. The medium-term crossing the long-term predicted difference has struggled at times reacting to this.
But that’s because, in my respectful opinion, the market has been heavily manipulated by China, by this person, by the Fed. But again, if that coronavirus gets worse and China shuts down more things, then there’s going to be less and less demand and that could affect the S&P. I believe that this is already picking up on that. We’ll keep an eye on it, but again, we’ve still got a bit of a problem, I think, in just buying or panic buying up here because people are pouring into the market. I’m still on the fence on this one. We’ll see how it plays out, but there is a signal, right, good, bad, right or wrong, no indicator or signal is 100%, but the medium-term crossing the long-term predicted difference has been quite good. If nothing else, I’ll respect what it says and I will keep my eye out for a potential short.
Light Sweet Crude Oil
Now, oil, again, oil is basically running on the equity coattails here. OPEC interfering, trying to push oil prices up, but the reality is China is using considerably less oil while this coronavirus has taken hold of the country. Again, we’re failing 52.78. In my respectful opinion, there is still not a lot of demand for oil here guys. I don’t anticipate any big move up in oil and if anything, we’re likely going to fail this week yet again. Just remember, holiday short week, don’t jump into the market till after 9:00 AM on Tuesday morning.
U.S. Dollar/Swiss Franc (USD/CHF)
Now, as we move into our main Forex pairs, the euro, again, the only currency that basically lost ground to the dollar, the Swiss Franc maybe a little bit too, but mainly the euro took the brunt of it and again with that high correlation to the dollar index. Now, once again, we’re coming into some very strong support areas down here in this lower 108 area. We can see that we’ve got our medium-term crossing our long-term predicted difference, so we will be watching very closely for a potential long on the euro. Now, they’re going to try and run stops. You can see the predicted RSI at 5.7. If we get a move, it’s going to be fairly significant, probably back up into the 109.68 level. We’ll keep a close eye on that, but we have already an early warning sign that the euro is potentially getting ready to move higher, not lower, but it’ll be a data-intensive week for the euro, so we’ll see.
Now, with the US-Swiss Franc, once again, if that euro does turn around then the US-Swiss Franc will also turn lower. We’re up against a very significant resistance zone here between 98.31 and basically the parody level. That is basically this dark red zone up here, is the sell zone. But first, we would actually have to clear this level before we even talk about those upper levels up around the 98.31 area. I think we have even more significant resistance coming in at essentially the 99.17 area, which I anticipate will hold. We’ll be watching very closely for shorts, but as you can see, the medium-term crossing, the long-term predicted difference is pointing to yet even further dollar weakness.
British Pound/U.S. Dollar (GBP/USD)
I’m seeing something very similar with the British Pound here. With the British Pound, we’re advancing over that predicted moving average, the medium-term crossing the long-term predicted difference off this lower support area. Very nice trade, again. When we talked about this in last week’s Forex weekly outlook, that we’re looking for places of value to sell US dollars. Forex market is buying or selling US dollars, whether you’re on the majors of the cross pairs, the US dollar is indirectly in those cross pairs also, which can easily be checked. Pairs like Great Britain, Japan, for example, there is no such thing. It’s Great Britain-US and US-Japan. That’s what makes up that cross pair. Always remember you’re still dealing with the US dollar, even if the US dollar is not the base or the quote currency. Very important to understand that. Right now, the British Pound, as long as we’re holding above 130 we should see it advance back towards this resistance area around 132.08.
U.S. Dollar/Japanese Yen (USD/JPY)
Now, when we look at the dollar-yen, this has been a fairly easy trade. We’ve got this resistance area that’s still unable to be breached at the 110.30 area. We’re going to continue to monitor this resistance in this zone up here. If we can’t break through it, we are going to take a significant move lower, but we would need stocks going down also. Dollar/yen is unable to move lower to any significant amount because of the S&P 500. Just remember, if you’re trading this pair, S&P 500 up, dollar-yen is going to go up. That’s what’s very confusing, that there are no buyers for this pair when the S&P 500 goes screaming up to the 3380 mark and there is nobody buying this pair.
U.S. Dollar/Canadian Dollar (USD/CAD)
Now, with the US CAD, once again, we’ve had a very good week of shorting this thing. You can see that we’ve broke down below the vantage point predicted moving average. At the beginning of the week we had our Monday trade, classic reversal on Tuesday. I’ve warned everybody here on the AI Outlook, that be careful with this pair. Whatever it does on Monday, it does the exact opposite on Tuesday, guys. That’s just a little tip from an old dog that’s been in this market for a very long time and I’ve seen this with US, Canada, very frustrating for traders. Just remember, whatever it does Monday, whether it’s a big move up or a big move down, it’s likely going to do the opposite on Tuesday. That’s what it did the entire week and down we go.
Australian Dollar/U.S. Dollar (AUD/USD) &
New Zealand Dollar/U.S. Dollar (NZD/USD)
That is a huge warning sign, guys, that the S&P and this could be getting ready to move lower. However, our dips are rather shallow, so we could see a break to the upside on this particular pair. But again, guys, it’s not about being right or wrong here. It’s about knowing your levels. We’ve got the support at 109.77 we’ve got resistance at the 110.30 area. That was the entire week last week of trading. So if we start breaking down below this vantage point predicted moving average and stay below there, then this pair is likely getting ready to move lower. Right now, we’ve got our medium-term crossing our long-term predicted difference to the downside and it’s being confirmed by the neural index and a falling RSI. So, shorts are certainly looking very, very reasonable for next week.
So now, we have to see if we can hold. We’ve got support building down here. You can put it right in there. We’ve got good, strong support down at this particular low here at 132.36 and that is where the T crossed long and the VantagePoint software is too. So we’ll watch this area very closely, but right now, there’s a slight bias to the downside. Now, as we look at the Aussie and the New Zealand currency, very similar trades. You can see I’ve got just the blue line by itself here. We’re struggling to hold above it. The Aussie had a pretty good week, as did the New Zealand, then on Thursday and Friday we just move into profit-taking. But this support level down here is really what you want to watch. This most recent verified zone off this particular bar rate here, basically, the entire week. And again, we talked about in this in last week’s weekly outlook before the market open, that we’re looking for places of value to sell US dollars. This was a great place, came to fruition.
But again, profit-taking forces it back down again. So the Aussie is still structurally bearish, and if the equity market sell off, that’s not going to help the Aussie currency, nor will it help the New Zealand. The New Zealand got a very strong boost from the Bank of New Zealand this week, but again, it was not sustainable. It came up, we hit the VantagePoint long T crossed long to the number, and then down we go again. So once again, there was a number of these different currencies that are pointing towards weakness in the global stock markets. So we’ll keep a very close eye on it. But again, our main event risk next week is the FOMC minutes, which I don’t think are going to say anything that we don’t already know. So with that said, this is the VantagePoint AI Market Outlook for the week of February, the 17th-