VantagePoint AI Market Outlook for the Week of March 2nd, 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 March 2nd 2020.
U.S Dollar Index
Now, to get started this week, we begin where we always do with that very important US dollar index. Once again, this is a market outlook, not a recap of something that’s already happened. We’re looking to prepare for next week with strategies using the VantagePoint software. There are many different strategies that can be used with this particular program, I’m simply showcasing some of those.
Now, when we look at the US dollar index, we can see that the dollar’s had a pretty tough week against some of the currencies, more specifically against the euro. The dollar has made up significant ground against the Canadian dollar, the Aussie dollar, and some of these, the British pound. Again, the dollar index is highly, highly correlated to the euro currency more specifically.
When we look at this, in the past, I’ve talked very specifically about cycles in the US dollar. In my respectful opinion only, you can use the information I’m providing in your own trading or not. That is your choice. I’m simply outlining what I have seen, that there appears to be real dollar demand in the first part of the new month up until after the non-farm payroll, which would, of course, be a week from this Friday. When we look at this, we obviously look for potential reversal points. Now, we can see that the predicted RSI is at 16.1, so we are moving into somewhat of, again, an oversold condition. That doesn’t necessarily mean it’s going to go higher. We look at the real indicators.
Now, when we look at this, we have two very strong pivot areas using the VantagePoint software, 98.740, we’ve broken down below that. When we click on our F8 and we use our blue line only, we can see that there is virtually zero lag in a trade set up like this because we’ve eliminated the black line. In this particular case, we’re using the blue line only. We can assess very clearly that the market is in constant contact with this predicted moving average, which takes the correlation of 31 other markets when it forecasts the target market, in this particular case, the dollar index.
When I’m looking at this, right now, I can see where my likely retracement point would be. People use different tools, they use Fibonacci, they use a lot of different things, all of which can absolutely be used. In this particular case, using that pivot area of 98.790, we would look for a retracement back to this particular level. Now, the other thing I will advise the VantagePoint users is there is a very strong correlation right now between the dollar and the S&P 500. If the dollar turns around, then it’s more likely than not the S&P 500, believe it or not, will follow.
When we make a comparative analysis of that to gold, we can see that actually money was very quietly moving out of gold last week, not into gold, despite the global crisis right now with the coronavirus and everything else. We can see that gold last week made a strong top-up in this 1,691.00 area, but then did absolutely nothing the rest of the week. We then broke down below that key pivot area, 1,605.00. When we click again on our F8, we can identify a pivot area. Now, the one thing I will point out with also, by using these verified support zones identified by the AI, we can see exactly where the market stopped on that particular line. Now, that is a strong level of support but, once again, this move lower, whether it be corrective or a new trend, that’s left to be seen.
What we can identify is that using the medium-term crossing the long-term predicted difference, that is measuring the medium-term crossover against the long-term crossover. Again, I wouldn’t want somebody to misinterpret something that I’m not using those crossovers because I actually am, I’m just using them in a different way. That’s the benefit of the VantagePoint software. You can build whatever strategy that suits your trading style. In this case, the medium-term crossing the long-term predicted difference warns me here when I connect the dots to this, that gold is struggling. Now, again, that goes back to what I had stated at the beginning of the presentation, that the dollar seems to cycle around the beginning of the month. There’s real demand for US dollars, big banks, government having to settle trade balances and these things. That’s a hard fundamental that traders should never overlook.
We combine advanced inner market technical analysis with basic fundamentals that are happening in the market. That’s how most traders do things. When we look at this, we’ve got strong support down there. Now, if that’s the case and gold keeps moving lower, that should send the equities back up. Now, once again, when we look at this… And I’ll point this out again, this is an outlook, not a recap. In last week’s weekly outlook, we looked at this right now. I said in last week’s weekly outlook that we have an order flow issue up here. We have no long orders going up into this particular area. When we go back to last week’s weekly outlook, again, an outlook, not a recap, and I had stated that for the first time the market is closed below this blue line. I discussed the two-day rule, the two days closing below that blue line put us far ahead of this.
I also last week made reference to the medium-term crossing the long-term predicted difference, so I’ve got no long orders going in here. I’ve got the VantagePoint medium-term crossover weakening against the longer-term crossover to the downside. That suggests that, again, in last week’s weekly outlook, I suggested that the equities would likely go lower. Now, that’s how you get out in front of a market, guys. That’s very important using this type of setup. However, when I look at this right now, once again, I am seeing basically a very similar signal that would put us short last week would theoretically potentially put us long this coming week. We want this pink line crossing over that blue line, and we want the neural index turning from red to green. I believe we could get that as early as Tuesday or Wednesday.
If that’s the case, then we then pick our retracement point. That retracement point is 3091.00. There’s going to be Fibonacci levels up around that level, all that, use those two. If that’s how you so like to trade, then all the more power to you, but this blue line is quite powerful. The further we move away from it, the more likely it is we’re going to retrace to it, right? These are the things we want to look at.
Light Sweet Crude Oil
Now, with crude oil, once again, crude oil is very much following the equity markets here, so if we can get some kind of a bounce out of the S&P 500, we could see a bounce in oil. My concern here is that I’m not really seeing a whole lot of support down here. I would probably have to go back a couple of years, so I would have to go all the way back to, again, December 2018 to find a low of 43.24. Now, we know the cycles in oil. Predominantly demand picks up for oil around May or June and particularly into July, so watch oil around this 43 area. There might be something there, but I think either way oil goes up as we move closer to summer driving season.
Once again, we are looking for something in the VantagePoint software to trigger us to buy. We don’t have that at the present time. Again, whenever we go against any particular trend, we have to have a reason for doing it. Right now, we don’t have one. Once again, the medium-term crossing the long-term predicted difference, the AI identifies a verified resistance zone. The medium-term trend weakens against the long-term trend and the neural index turns red. We break the 40 level on the RSI, one, two, three, strike three you’re out and down goes oil. Again, watch your equity markets next week very, very closely.
Now, as we move into our main Forex pairs, once again, when we look at this, the euro has had a very strong run based off that medium-term crossing the long-term predicted difference once again in reverse of the equity trade. Right now, the euro US, which I will advise VantagePoint users and it’s simply a comment that I’ve noticed, is there is a very high inverse correlation between the S&P 500 or global equities and the euro currency. What that means is that if the S&P 500 does recover, then the euro is likely going to fail at this resistance level right up here. Again, looking at dollar demand, when does real money appear to step in and buy dollars? It appears to be around the beginning of the month.
That can set off a chain reaction. Oil could go lower, equities could go higher, gold could go lower. There are all of these correlations there that the VantagePoint software registers. I simply verbally mention them on this presentation. Now, once again, our order flow is dried up down here. We’re not getting any more sell orders by simply drawing a line here. I then look at the medium-term crossing the long-term predicted difference, so I’m measuring two different trends, the medium-term trend, and the long-term trend. This shows a reversal going higher.
Now, we’ve had a good run-up. Again, in most cases, the US dollar is strong the week prior to the non-farm payroll number, because you have traders that are heavily speculating on the number on Friday. Now, it’s going to be mixed because of the coronavirus, so there’s going to be a lot of noise in the market. Right now, we don’t really want to go down that particular road. What we simply do is identify where the resistance is. That’s at the high of 1.1095. We have additional verified resistance up to 1.1172. If these two areas hold, we get our pink line crossing our blue line with our neural index, we’re already in a heavily overbought condition.
Buying a break of this level, in most cases, you have about a 20% chance of making money because the market is only trending 20% of the time. That’s it, guys. The probability of a reversal between these levels is very high. Again, watch the S&P 500 very, very closely this coming week.
U.S. Dollar/Swiss Franc (USD/CHF)
Now, as we look as the counterpart to the euro, which, of course, is the US-Swiss franc, once again, we’re hitting a very strong support level down here, this verified support. Support and resistance trading is probably the most popular type of trading there is. With the AI, we identify the verified support zone. You can see on Friday that we came down and mysteriously just stopped dead on that particular number. That verified support zone is coming in at the low of 0.9612, so we would watch this level very closely. As you can see, a long signal is trying to form.
The slope of the RSI is no longer pointing down. It’s like a checkmark where it’s starting to point back up. Once again, when we click and look at our retracement point, I will use the predicted moving average and take the black line off to get that key pivot area. Once again, case in point, you’ve got order flow up here that has stopped. There are no more long orders going in. We crossed down the first day that we close below that blue line, which led to a pretty vicious selloff on this particular pair. You had multiple opportunities to get back into this trade. Every single day for the next four days, it kicked into this blue line.
Now, in my respectful opinion only, we’re moving a little too far away from this long pivot area of 0.9734 that goes to a market profile. When the market becomes out of balance, we have a retracement, so again, watch a move back towards that particular level.
British Pound/U.S. Dollar (GBP/USD)
Now, with the British pound, again, you can see that also we’ve got very strong verified support down here. The market is sitting right around this verified area, and it’s not able to break down. The big level you really want to watch this coming week is 1.2768. If we can hold above that level, then towards the end of the week, the pound is likely to strengthen. We’ve again a lot of noise around anything to do with the British pound here, guys. You’ve got Brexit is still kind of not really resolved there. They don’t have a trade deal between the UK and the European Union, so we’ll see how this one’s going to play out. For now, watch that support level down there and understand that if we are in a known period of dollars strength, then there could still be a short there.
You can see that we’ve had a full retracement back to the T cross long to the number on Friday. 1.2934, we kissed it and then had a significant rejection. Again, if I bring in my blue line only, I get my daily pivot area right here at 1.2866. We’re closing at 1.2814. If we’re going to reset short orders here, then we would wait for the market to move to 1.2866, that key predicted moving average. We got the predicted high at 1.2866. When you combine the two of them and the overall indicators, that would suggest that shorts are still in play on this particular pair.
U.S. Dollar/Japanese Yen (USD/JPY)
Now with the dollar-yen, again, the dollar-yen is taken, in most cases when we see a bar like this, guys, it’s pretty much exhausted. The dollar-yen is going to be dependent on what happens with stocks. If stocks start to recover early next week, by Tuesday next week, then you’ll see this support zone hold. Again, I’m combining the key pivot areas both on the upside and the downside. I’m combining inner market correlations and key pivot areas using the VantagePoint software. We’ve moved all the way down and closed at one 108 04, but the T cross long is sitting up at 109.98 or the 110 area. It screams of a retracement back to that particular area, but that will be dependent on gold still moving lower and we get some kind of recovery on the S&P 500.
Again, this is just combining advanced inner market analysis with basic market fundamentals. That’s what any good trader should be doing. We don’t want to ignore basic fundamentals in the market, particularly when you’ve got a major announcement like the non-farm payroll. That key pivot area is also at 109.71, so what I usually say in these weekly outlooks is we should expect some kind of retracement back towards that level. This falls under the guise also of a market profile when the market becomes out of balance. Too many traders on one side usually screams of a reversal, so watch your support level right here. Very easy to do with the VantagePoint verified zones. We’ve got a low of 107.65. We’re looking for the market to continue to close above 107.68. That’s likely going to trigger along.
U.S. Dollar/Canadian Dollar (USD/CAD)
Now, with the US Canadian pair and our main three, these three pairs, Aussie US, US CAD, New Zealand, they’ve really taken a beating this past week. They’re also correlated to the S&P 500 so, again, a lot of our trading is dependent on what happens with these stocks. If the market just basically takes a deep breath, it’s not the zombie apocalypse here, guys, or not yet anyway, it’s the coronavirus. It’s serious but, again, I think it’s got a little ahead of itself, so we’ll see how this one plays out. My job here is simply to advise you of certain types of signals.
We are definitely getting overbought on this thing, but the Bank of Canada next week also could be cutting rates, which is going to likely keep pressure on the Canadian dollar until after we get that announcement. Then, we should see a retracement. If we retrace, we’re looking at the T cross long, 1.3291. When we look at our daily pivot area, once again here, guys, we’ve closed above that blue line. When we follow this blue line, it’s a very easy trade set up here, guys, right? Every day, long, long, long, long, all the way up. Then, we start to break down right here. Then, we go down for eight days, then we close back up above here and now we’re going back up on the upswing in a period of known dollar strength. Again, a very easy system to replicate what I’m showing you guys here, very, very easy to replicate in your VantagePoint software.
Right now, our key pivot area, which we should expect some form of retracement to, is 1.3348. At that area, we can look and see if that critical level is going to hold, because this is a weekly outlook, not a daily outlook. It’s for the entire week, so we set things up for the week, not for one day. It’s not a recap. I’m not showing you something that’s already happened. We’re talking about what’s going to happen. We would expect the market to come back to 1.3348. That’s what we would expect.
Australian Dollar/U.S Dollar (AUD/USD) & New Zealand Dollar/U.S. Dollar (NZD/USD)
The same thing with the Aussie and the New Zealand. If you look at the bar from Friday, there’s the bar, the Friday bar, from Aussie US. If we look at New Zealand US, if I quickly click on that, you can see that they’re virtually identical, guys. It’s the same more or less trade. Now, once again, we’re extremely oversold. That doesn’t mean that it can’t go lower here, guys. Aussie’s taking a hit also from its ties to China, the coronavirus. It’s hurting these two currencies a lot, but, again, are we overdone? Our key level here, 0.6370, we’re closing all the way down at 0.6227. The further we move away from that critical pivot area, the more likely it is we’re going to retrace.
If we look at our, again, the blue line by itself, there’s far less confusion here. We can see that, again, back here, this trend actually started all the way back here. We’ve retraced to this blue line too many times for me to even count in this video, right? We didn’t get our rate here. We only got close above one day, and then the trend stopped and resumed. It stopped near this verified resistance, almost right on that verified resistance, and down we go. When we look at this again, we can very quickly identify this and say, “Okay. We should expect some kind of a retracement to at least 62 88, but if we close above 0.6288 two days in a row, then we’re good to go for longs.” Right? That’s the way we look at this.
The same thing can be applied, the exact same strategy, extremely easy to replicate what I’m doing here, we see the exact trade set up here. This has not been a one or two-day thing here, guys. This has been going on since the beginning of the year, the weakness in the Aussie and the weakness in the New Zealand. The CAD’s done a little bit better, but not that much better, but the same thing is in play. When we look at that pivot area, we’ve got 0.6565 for what we would expect a retracement point. Then, when it gets to that point this week, then we assess, okay, do we want to continue to sell?
We look at the market conditions as we start moving forward into the week. It’s a very, very effective way. Again, what I’ve talked about before, you have a number of CTAs and analysts have talked about this, reversals on Tuesday. What we would be looking for is a weak US dollar right out of the gate on Monday, only to see it turn around on Tuesday. That’s what we would look for. With that said guys, this is the VantagePoint AI Market Outlook for the week of March 2nd, 2020.