VantagePoint AI Market Outlook for the Week of March 23rd, 2020
Hello everyone, and welcome back. My name is Greg Firman and this is the VantagePoint AI Market Outlook for the week of March the 23rd, 2020.
U.S Dollar Index
To get started this week, we’re going to begin where we always do, with that very important U.S. dollar index. Extreme volatility hitting the market here, the dollar money clearly flowing into the U.S. dollar. What we’re doing here now is looking at some of these verified support and resistance zones to help guide us through this volatility. We’ve got a very strong verified resistance zone sitting on the dollar index at or about the 104 level. This goes back all the way to 2017, so when we look at this and we cross-reference this to the medium-term and longterm predicted difference, we’re looking here for, again, the dollar to start to lose some of its momentum. Again, when we’re looking at this kind of volatility, up is down, down is up, things can get very, very volatile in every market. In the Forex market, we’re seeing some of the payers that normally move 40 or 50 pips a day are now moving 300 to 500 pips a day. That’s the kind of volatility. We look at the Dow Jones, we look at the S&P 500 where they normally would move less than 1% of their value per day, they’re moving up to 11% of their value, some 2,000 points. We do need to take this into consideration. We’ve been in an overbought condition on the dollar index for at least seven to eight days, and the overbought and oversold, or accumulation distribution, struggles in these kind of markets because it’s a strong trend as money pours into the U.S. dollar.
Now again, this coming week this is not a recap of something that already happened. This is an outlook. When we’re talking about an outlook, this video is being produced on Sunday before the market opens. We identify these key levels and potential shifts in market sentiment. Right now, our neural index remains solid. Our predicted RSI is starting to flatten out and we’ve ended up with a bit of a down day, but after another new high was put in on the dollar index. For this coming week, the level that you want to watch is the 104 level on the dollar index and keep a very close eye on the medium-term predicted difference that identifies the strength of the medium-term crossover against the longterm crossover.
Now, as we move into the additional markets, we can see that the S&P 500, once again, we actually talked about this trade, guys, here on the VantagePoint AI YouTube channel several months ago. Well, not several months ago, excuse me. That was back in February, where I had basically identified this point here. Again, when we get a signal from the VantagePoint software like this, there is no guarantee of course that it’s going to go in that direction or how far, but when we look at the retracement points, after we’ve broken through or again, like I like to do is bring in the blue line by itself, the long predicted, which is the VantagePoint predicted moving average without the black line. This is one of my favorite strategies, so when we start to break down below here and we close below this blue line, for usually two days in a row is what I’ll wait for. That will trigger, in most cases, probably 80% of the time the market’s going to move relatively hard in that direction.
This was a much bigger move than any of us anticipated. I hope everybody is safe at home and they’re practicing social distancing and they’re, again, being mindful of this Coronavirus. It’s much bigger than any of us thought that it would be. We’re in uncharted waters here, guys. In no time in history that I’m aware of, in the free world, have governments ordered businesses to close, to tell people to stay at home to combat this virus. This is going to have a very negative effect on every country’s GDP.
But when we look at this right now, you can see that the S&P 500 this entire past week has hit into this VantagePoint predicted moving average and it has not been able to get above it. The easier trade, potentially, the easier trade here guys, we identify this 2,427.88. If we can close above this level for two days in a row we may be able to put a bottom in here. That’s what we would be looking for. We’ve got two bars that are stacked up beside each other, I’ll identify that so everybody can see it. That’s a good sign. But again, I think we have more problems ahead.
When I look at the predicted difference here, the medium-term predicted difference, it’s breaking away from the longterm predicted difference and starting to move higher. That’s another positive sign. But again, I’m domiciled currently in Canada. Canada is on lockdown. I understand that a lot of parts of the U.S. now are moving into lockdown. Europe is in lockdown. Businesses are not running, so we have to be very cautious here. That’s how I will leave this. We’re looking for that neural index to turn green and we’re looking for the market to break and close above this blue line to confirm we have some kind of short-term bottom in place.
When we look at gold, again, when we we’re using our verified zones effectively, we can see where the gold has failed. We’ve paused here at the low of 1,453. We can assess that we do have the medium-term trend weakening against the longer term trend, suggesting that gold potentially could be reversing next week and going higher. We would look to match this particular signal with the neural index going from red to green. If we can get that, we should be able to move higher.
Our longer term level here, when we look at this, again, our longterm pivot area is 1,562. But if we click on F8 on our VantagePoint software, we can see that we have 1508. If we can close, again, two days in a row above this level and we get our neural index turning green, we are likely going to have a potential long trade on gold, so we’ll be watching this one very, very closely next week.
Oil traders out there, again be very careful here. The current administration in the U.S. is talking about intervening between the conflict between Saudi Arabia and Russia. That’s causing oil to have short rallies but you can see that we’re staying below the VantagePoint key level. Our longer term pivot area at 34.81 continues to be untested. When we look at our key VantagePoint, long predicted our daily, our intraday week-to-week pivot area that we watch, we are unable to break above that. If we can close, again, above 26.90 we may have a short term bottom in oil also, but oil will follow the equities. That much I am seeing very clearly, that the two are basically joined at the hip.
When we look at Bitcoin again, we have some pundits out there that like to come out of the woodwork and say, I told you so, Bitcoin was a scam. Just please ignore these people. Because the bottom line is Bitcoin has been a very strong investment in 2017 and 2018, and in 2019. When we look back from one year ago, guys, and we look at this, the market you can see has come down and hit that verified support zone, but it was basically about one year ago to the date that Bitcoin had a huge rally up here, from going down to the current level here down around this 35, 3,900 level, until it finally paused and retraced up at the 13,000 mark. Again, a very strong move.
Bitcoin does appear to be following the equity markets also but what’s interesting in this case is most of the global markets all crashed together. The only market that really went up strongly is the U.S. dollar. Right now, Bitcoin has to break above our key pivot areas, 6,646, but when we look at that seasonality, Bitcoin hasn’t been trading for a long, long time here in the major exchanges, but when we look at this again one year ago, there is a bit of a seasonality there, and the fact that we failed exactly on that verified zone is very impressive. Then that was followed up by the medium-term, crossing the longterm predicted difference. So again, if we just ignore some of these pundits that are so dead against kind of investment in Bitcoin and just follow the seasonality, follow the chart, follow the VantagePoint indicators and again, even in this past week, Bitcoin was a very good long trade.
As we move into some of our major Forex payers, once again, all I can do is caution everybody. The Euro U.S. has been a little more stable than say the pound dollar, the pound dollar down some 14, 1500 pips, where the Euro is still down. But once again, when we look at our medium-term crossing our longterm predicted, this is a classic signal, a contrarian signal in the VantagePoint software that it warns us that the current trend may be running out of steam.
Now, when I look at that medium term crossover, medium term crossing the longterm predicted difference, we’re not quite there yet, but I suspect we could be close because as we come down into this very, very powerful area here, we would have to come back probably about two years, actually even further than that, to find these verified zones down here where the market has failed. There we are right there, and that low point is at 106.10. That’s from again 2017 here, guys. When we look at that, that’s where the dollar index reversed back some three years ago. We want to be very mindful of this 106.10 area. When we come to a major support level like that and the VantagePoint indicators start to slowly roll over, then we want to be watching very closely for a potential long trade.
Again, our longer term pivot area here would be sitting at or about… This daily pivot area, excuse me, is going to be coming in at about the 108.87. The further we pull away from that, the likely it is we’re going to retrace to it, or trace back to it. We’ll be watching this level this coming week. First of all, to see if the 106 level can hold and then, can we retest and break back up above 108? This is a very easy strategy to replicate here guys, and that is the purpose here. First of all, to do an outlook, not a recap, and second of all, provide a strategy of key levels where you can monitor.
U.S. Dollar/Swiss Franc (USD/CHF)
As we look at the U.S. Swiss Franc going into next week, once again, we’ve had a big push here, but you’ll notice that the market did not close above this verified zone two days in a row. It’s struggling right at or about this .9848. Now, if we can make a big push here, once again, that does not necessarily mean we’re going higher because we have additional verified resistance above the parity level, that all of these years we have not been able to hold above parity for any more than a couple of weeks, maybe a month, and then it crashes back down below the parity, showing that dollar weakness. Once again, we’ll continue to monitor this pair, but my optimism on further longs on this pairs remains somewhat guarded because you can see that we’re sitting at 89.1 on that predicted RSI. We’re overbought, but we’re looking for that medium-term trend to start to weaken so we can see if we can get into some shorts.
British Pound/U.S. Dollar (GBP/USD)
When we look at the pound dollar for next week for our Forex traders, this has been quite a trade here on the short side on this, and this has extended far deeper than I ever thought it would. Part of that is being fueled by, of course the Brexit and that the U.K. no longer has the protection of the EU, the European Union. In my respectful opinion only, this pair, or anything to do with the British pound is going to be extremely volatile, more so than most of your other Forex payers and your other currencies because there’s a lot of what ifs around the pound dollar.
U.S. Dollar/Japanese Yen (USD/JPY)
Right now, our longer term pivot area here, we can see that’s coming in around 1.2325. But if we look at our main level, you can see our long predicted, our predicted moving average, comes in close to our price action and it allows for better entry points on a breakout play or using it as a pivot area. That level is coming in at 1.1809. We’ve pushed above it, but we’re not able to close it above this level, so watch that level very closely.
The beauty of this strategy, guys, is you can tag limit orders to this blue line the night before because the VantagePoint software, remember, updates at 6:00 PM Eastern Standard Time, and the pound dollar usually doesn’t start moving until around 3:00, 4:00 AM Eastern, so we have plenty of time to get our orders in. Even if you’re in North America like me, I put my orders in and then I go to bed. It’s easy peasy, right?
When we look at the dollar yen, again, the inner market correlations here have broken down. Again, only in my respectful opinion, is because a lot of industry is not running here. When we look at the dollar yen, this is a major, major hurdle for the dollar yen at 112.22 on this verified zone. If we see any signs of the medium term crossing the longterm predicted difference, that would be a trigger for us to look for shorts up in and around between 112 and 113, but that would be contrarian against this particular trend.
But in most cases you’ll remember that when the S&P 500… The high correlation between the S&P 500 and this payer… When the S&P 500 was trading at 35, 3,400, the dollar yen still struggled getting above 110. If that S&P can recover somewhat, then if down is up and up is down, that would send this particular pair lower. Our retracement point on this particular pair, 107.76. Again, if we hit our long predicted, we can identify a key pivot area. If we want to stay with the trend and go long, then we would be looking at buying near the 108.74 area. If we’re taking the contrarian position, we would look to short around the 112.22 area, guys. That’s how we would play this.
U.S. Dollar/Canadian Dollar (USD/CAD)
With the U.S. Canada, once again, when we look at this pair, we’ve hit a verified resistance zone up here that’s been identified in the VantagePoint software where I have to go back quite a ways to find where VantagePoint’s AI picked that verified zone from. You can see that I’m backing this up three years to try and find that pivot area up there.
But again, it’s being identified for me, so if I go back and look at five years, that’s where we see where this level comes in and that level comes in at the high of 145.88. So when we look at this, there’s a rationale where that line came from. We’re hitting into that area. Going back, it’s actually closer to the 147 area, excuse me. But we failed twice there and now we’re starting to pull lower. The key VantagePoint level there is 138.70. Again, if we click on our F8, this is the level you guys want to watch to start your trading week, 142.41. If we close below this level two days in a row, the equity markets recover, oil recovers. That will send this pair considerably lower next week. But if the aforementioned does not happen, then this pair will easily retest that 147 level.
Aussie/U.S. Dollar (AUD/USD)
As we look at our two main other commodity currencies, which is our Aussie and New Zealand, both of which are really, particularly the Aussie, is just taking an absolute beating here. But again, when we look at price action and we look at order flows, the order flows of shorts stopped at the low of this particular bar. We look at this around this particular level, around this .5510 area. We’ve got two bars to the left and one bar is to the right, but we do have the medium-term crossing the longterm predicted difference. But again, we want that neural index on board, guys, okay? We don’t have it just yet. Keep an eye on the low part of this particular chart and let’s see if this level down here can hold. When we back this up again, the exact level on that low is again 155.10. If that continues to hold, the neural index turns green.
New Zealand/U.S. Dollar (NZD/USD)
We can see we’ve got a rising RSI from… It’s kind of funny, I have to say this, the RSI, guys, is at 1.8. It pretty much can’t go much lower than that. To say it’s oversold would be an understatement, but let me remind everybody, this thing has been oversold for the last eight trading days. If you’re playing an overbought or an oversold condition or accumulation distribution, you’re really struggling here. We need to identify order flow traders, price action, where the short orders stop coming into the market. As long as that 155.10 area holds, we should see some kind of retracement back to these key VantagePoint levels. The major level, that’s a tall order at 162.24, but again, if we click on our F8, we can see that our blue line comes down very close to price. If we can close above .5909, we should be good to go for longs here. But again, very, very risky at this time.
The same thing applies to New Zealand here guys, I don’t think I need to tell you. You hear me say this every week. It basically is the same trade, but the Aussie’s taken it much harder than what the New Zealand is. If we do the same thing, first of all, we want to identify where our order flow traders stop selling this particular pair. They stop selling this particular pair, as you can see, at this low of 54.60, at least for now.
To start our trading week, we monitor to that level. We can see our medium-term crossing our longterm predicted difference is crossing, but the neural index is saying not yet. Again, I think we have some very good opportunity, but I will remind everybody again that most countries are in lockdown. Most businesses are shut down. Up is down, down is up. We don’t have a lot of liquidity coming into the market. We’re seeing wild swings. You want to take that under advisement in any trading, particularly early in the trading week. With that said, this is the VantagePoint AI Market Outlook for the week of March, the 23rd, 2020.