VantagePoint AI Market Outlook for the Week of November 4th, 2019
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, Bitcoin, 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 November the 4th, 2019.
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, but we will be looking at all of the major markets with a number of Forex payers. Now when we look at the US dollar, the dollar is a driving factor in equities and gold, a number of different commodities. We can see here that we failed the level we talked about in last week’s weekly outlook at the 97.680 area and the dollar has rejected moving higher. Now that doesn’t mean that the dollar won’t move higher in the days ahead, more specifically, we’ve come out from the FLMC. The FLMC is now saying that they are basically suggesting that they’re going to pause, there’s not going to be any more rate cuts, that’s a dollar positive. When we also look at the nonfarm payroll number on Friday, that too is a very strong dollar positive. That doesn’t mean that demand for dollars will increase right away, but it doesn’t mean that the dollar is going to sell off hard either.
We can see that we have a very strong verified support level that goes actually all the way down to this main level here at 96.550, only a break of 96.550 would then take the pressure off the upside, actually not the downside. Again, when we come into the bottom part of these ranges, 80% of the time, we see a substantial bounce.
Now when we look at gold, the one thing we want to understand here with gold here is that gold has had a very, very good year up at one point about 24% on the year. Very, very impressive. Now when we look at the current state of gold here, what we want to make sure is that we’re looking at everything. Now in this particular section here, we can see that gold is in a channel. It’s been in a channel here for basically about the last month and a half or so. But in 90% of the time, guys, whenever you come off a fairly large move, when we back our charts out here, we can see that we’ve got a pretty substantial move to the upside on gold.
Most experienced traders will tell you that nothing goes straight up and nothing goes straight down, that the market is likely just pausing right now, getting ready for the next move, either up or down. But by the looks of the VantagePoint indicators, they’ve accurately basically told us we should be buying gold every time we dip down anywhere between basically the 1478.00 mark or even if we’re lucky enough to get 1465.00. But as you can see, the market has drawn a clear line in the sand that it has no interest in selling gold at this particular level. They are only interested in buying.
Now we do have some sellers up here still and there’s still formable resistance, but we don’t want to be missing out on an opportunity to buy something. Even if gold moves from 1470.00, 1480.00 to 1505.00, that’s a very good return on investment. That’s the way we should be looking at things. So again, when we look at these indicators right now, they’re bullish to neutral, but we’ve got a fresh triple EMA cross. We just have to break through this resistance.
Now the fed could cause problems with that, but again, when you look at gold here, guys, you want to ask yourself, has anything really changed here? Is the global economies, are they moving higher or are they moving lower? They’re basically softening globally, right? Is there a trade deal with the US and China? No, there is not. They haven’t even managed to sign a phase one deal yet, let alone settle the whole thing. Over the course of the weekend, China’s been awarded 3.6 billion in tariffs from the WTO. So there’s a number of different factors that absolutely support buying gold. So please, when you’re looking at this, make sure you’re looking at the broader picture here and just because something is stalled or it’s a little bit sideways here doesn’t mean there isn’t a buying opportunity.
We can also assess here too that despite the equity markets moving higher, that has had zero effect on gold selling off. That’s a fact. When we look at the charts, it’s actually strengthened gold. So understanding these inner market correlations, that one of these two prices is probably not right. By the look of it, we can see that we’ve got early warning signs and the VantagePoint software from the medium term, crossing the longterm predicted difference that predicted Mac D trigger, they’re all saying that the market is going lower. When we look at the predicted RSI, we’re at 87.40, so not exactly the best place to be buying the S&P 500. And when we cross reference that to the dollar, as of late, the strong inner market correlation has actually been to the US dollar, not the Euro. So basically if the US dollar is, if we believe that the US dollar is going to go lower than the probability is the S&P 500 is going to go lower too. So try and keep that in mind, guys.
Light Sweet Crude Oil
Now when we look at oil for next week, oil is basically an equity based trade. We’ve had a big move up in oil, but has anything changed from last week? The answer is clearly no. We still got a top in place here at the high at 56.92 and we have very strong verified support starting at 52.46 extending all the way down to 50.95. So in order for oil to move higher, the S&P 500 would have to keep moving up. And the probability of that is less than 50% in my respectful opinion based on the aforementioned comments.
So we want to look at all the factors here, guys. We don’t want to just look at one indicator and say, “We’ve got accumulation distribution or we’ve got some other indicator here that is suggesting.” A single indicator is like doing single market analysis. We have to look at the broader ranges first of all, then we have to look at the inter market correlations, and we also have to take a strong study of price. So when I look at all of these things, oil is getting a boost because the stocks did, but now the stocks are going to have to stand on their own two feet. They’re going to be taking the training wheels off so to speak, because now the stocks, they’ve largely made a move up on the understanding that the fed is going to continue to cut, cut, cut down to zero. Now the fed has flip flopped and said, no, they’re not doing that. It’s going to be data dependent, and with the nonfarm payroll number on Friday, that’s not overly supportive of that position that equities are going to go much higher from here.
Now as we start to move into our main Forex payers, before we do that, we do want to make sure that we’re at least looking at Bitcoin here, guys. There’s a lot of different people have a lot of different opinions here, but I always tend to go for price. And basically I’ve got a line drawn in the stand down here. We’ve talked about this every single week. I’ve included Bitcoin in the analysis because I believe there is something there. So if we look at the low here, around 7789.00, during that Zuckerberg testimony, we pushed slightly below the range. And then you can see the buyers came right back, storming back in.
But we can also assess here too, that the benefit of having these verified zones cutting across here, it warns us that if we’re buying, we still have to clear this area up here and we couldn’t do it. So one could argue that Bitcoin is still bearish, but in my respectful opinion, once again, we’re trading in a range and it’s still a strong buy on dips. Now, again, a lot of people have a lot of different opinions when it comes to Bitcoin, but we can’t ignore the fact that we’ve got somebody here, or a large group of people that are buying it. Okay?
Euro/U.S. Dollar (EUR/USD)
Now when we look at the Euro US for this coming week, we can see that the Euro has had pretty strong buying down off this initial verified support zone that we have built into the VantagePoint software, that’s coming in at 1.1073. We couldn’t penetrate below 1.1073 and up it went, but you can see that we’re very clearly here, we are stalling up at this level. Now the Euro again, needs to get going. In my respectful opinion, if the equity markets sell off, then we could see the Euro rise. I’m seeing a stronger inner market correlation to the equity markets, the S&P 500 and the Euro or an inverse correlation of the Euro and a more positive correlation to the dollar.
Now, this is not 100% correlation either way, but usually when the equity markets crash, the Euro goes up. So this Euro could be another warning sign to us that not only is the S&P 500 getting ready to move lower, gold is getting ready to move higher and the Euro may very well follow that up.
Now we don’t have a completed medium term predicted difference cross over our long, but it is trying to cross here so we’ll continue to monitor this coming week, but right now when we look at this, we can see here that our key VantagePoint level is 1.1098. If we bring in our longterm predicted, this is the area you really want to watch to start the week, guys. Can we hold blow above 1.1139. We keep challenging this area and on Friday we pushed down below it but we managed to close above it but we could not clear that verified zone. That verified zone is still holding price from breaking out.
U.S. Dollar/Swiss Franc (USD/CHF)
Now with the US Swiss Franc, another one, again, that’s very confusing with this current move on the S&P 500, that’s broken to the upside, I believe it’s about 90% fed induced on that move, because the usual suspects, which is US, Swiss Franc and US Japan are moving in the opposite direction of the S&P 500. So that is a huge warning sign to me that the the S&P 500 may not be what it appears to be.
So we’ve got some good support down here, but the indicators are still suggesting US Swiss Franc is going lower. Our main resistance point that’s coming in at 0.9915 and to begin the week, you want to watch this level very closely. The 99, if we start breaking up above 99 then we could go higher, but if we continue to hold below the 99 level, then this pair is likely getting ready for a bigger move down. That would mean the S&P 500 ultimately is likely going to follow. Now, again, nothing is 100% because we’ve got constant interference from this fed, but again, I think the market is really struggling with the idea that there’s going to be a trade deal between the US and China. They’re struggling with a number of different things, so we look at the indicators from VantagePoint, our predicted RSI sitting at a breakout point suggesting that we could be getting ready to go lower.
Now this support zone down here at 0.9839, that’s the area you want to watch. Be very careful around that level. Also, this level right here, just below around 0.9790. Now this pair is again sitting, consolidating inside a very identifiable range. When we go like this, we can block out this area and say, “Okay, we are not trending up. We are not trending down. We are sitting inside of a range. We’ve been in that range for months.”
Again, guys, when you hear people say that because something’s not moving up, it’s going to move lower, that’s usually non-factual. The market is only trending 20% of the time. 80% of the time, this is what it’s doing. Just like gold. It’s perfectly normal here guys. Don’t get it confused with something else. Remember, the market does not trend 80% of the time. So right now we’re within that range, but if we break down below these levels, we could be getting ready to make a move much lower.
British Pound/U.S. Dollar (GBP/USD)
Now with the Pound Dollar, again, more volatility around the election that’s been called. The Pound Dollar is really struggling up around this 1.3012 area. I anticipate that this area is probably going to hold at least for now, but if we start breaking out above that area, we definitely want to make sure we’ve got another price target. If we break above that level, we’ve got a price target up here that’s going to change considerably. Now that price target would then turn around and we would be looking for a move back towards this level up here, let me just drag this bar over here. We can see that. We would be looking for a considerably bigger move, probably towards the 132 area, 1.3280. But again, that’s a tall order at this particular time, so we’ll continue to monitor this. But again, right now if we look at the key level 1.2786 we’re looking for the market to hold above that level. As long as the market is above 1.2750, 1.2786, then longs are still viable. We can see the medium term crossing the longterm predicted differences trying to make a move here to the upside, so we’ll continue to monitor it. The risk is very high here for longs at this particular level.
U.S. Dollar/Japanese Yen (USD/JPY)
Now with Dollar yen, we’ve talked about this one extensively over the last couple of months here. And again, this is a classic case. When we look at something that’s consolidating a long range here, we can see that the Dollar Yen had a big move to the downside prior to the non-farm payroll. This area around 109.30 that I’ve been talking about for the last couple of months, is simply too hard for this to break.
Now when we look back a little bit in price where I was going back here, you’ll see that this move is absolutely identical to the move on August 1st of this year, verbatim to the number. So the Dollar Yen comes right up to that number, to the number of August 1st, and then crashes lower. I think that we should be respecting this particular move and this could be again, a leading indicator that gold is getting ready to break out to the upside. The S&P 500 is getting ready to break lower. Oil is getting ready to break lower. All of these things can spin off of this Dollar Yen trade, this failure at this 109.30 area. So we’ll see if this pair can recover. If this pair can recover this week, then gold will likely move lower, the S&P likely to move higher. But my optimism on that at this particular time remains heavily guarded.
When we look at the indicators from VantagePoint, the predicted differences they are anything but oversold here guys. They’re actually pointing towards a potential trending move. So as long as we can stay below this 108.40 level, get below this level and stay below this level, then we’re likely going to target a little bit lower back down towards the 106.50 area.
U.S. Dollar/ Canadian Dollar
Now, with US Canada, once again, showing the power of the verified zones. Once again, I’ve talked about this area between 1.31 and 1.30. And I’ve been very adamant about here, that the buyers are going to come back in. I’ve made the argument about the Canadian election. Canada now has some minority government. We’ve got oil prices that really are not strong at all, slowing economy and then of course we’ve got the Bank of Canada confirming everything I just said, the US China trade deal, they’re concerned about that. The Bank of Canada didn’t cut this past week, but they certainly hinted that they might be in the near future. That hurt the Canadian Dollar, so our resistance to start the week is going to come in at the high, which is going to be 1.3208. And our low end of that is going to be our VP level. We want to see if we can get above our critical VantagePoint level.
Now to get that level, we’re going to click on our F8, and we’re simply going to look at this pivot area here, in this pivot area of 1.3131, and we’ve got a verified zone down at 1.3042, this area here. When we look at this, this is what we’re dealing with for this week guys, let’s simplify our trading shall we? We block out a piece here and we say, “Okay, this is where we’re trading in this particular range.”
The last thing you want to do is complicate your trading with a number of different indicators. We want to keep it as simple as possible. Our indicators here predicted Mac D, predicted differences, they’re all saying that it’s going higher. So if it moves lower, that’s a buying opportunity. The key thing is, know your levels and play these levels. So again, long stills slightly favored on US Canada, but again, we have to see what the equities and oil do, right? The S&P 500 and oil.
Australian Dollar/U.S. Dollar (AUD/USD)
Now with Aussie US, once again, we are up against a very stiff resistance area. That high come in at 0.6894, once again, when we back these charts out a little bit, you can see that we’ve got a number of different resistance zones here, that the market is desperately trying to get above. Now, the Aussie Dollar got a bit of a boost from the RBA this week saying that they’re going to be on hold. They’re not hiking and they’re not cutting. They’re on hold. But now let’s look at this from the FLMC viewpoint now that we have that information. Now the FLMC is basically saying they too are on hold. So Aussie is now going to be at the mercy of the S&P 500 and some of your commodities. If they move like oil and the S&P 500 move lower or crash lower in the next several days or week, then the Aussie and the New Zealand currency are going to follow. It’s the same trade.
New Zealand Dollar/U.S. Dollar (NZD/USD)
So we want to watch this area up around 0.6920 and with New Zealand, we want to look at the same type of trade here guys. We want to keep it very simple. When we look at the New Zealand Dollar, you can see this very, very stiff resistance coming in at 0.6450. The market hit that level to the number on Friday and then failed.
Now again, the indicators are still mildly bullish, but we must get above 0.6450 and stay above 0.6454 at least two or three days, guys, before we even think about buying at this particular level. The probability at a failure between 0.6450 and this upper level up here at .65 is extremely high, particularly if we do get that sell off in the global stock markets.
So once again, we’ve got a lot going on next week, but we should revert more predominantly back to range trading. So what that said, this is the VantagePoint AI Market Outlook for the week of November 4th, 2019.