VantagePoint AI Market Outlook for the Week of September 30, 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 the U.S. Dollar, Gold, Crude Oil, The Stock Market, and Major Pairs.
Hello, everyone. Welcome back. My name is Greg Firman and this is the VantagePoint AI Market Outlook for the week of October 1, 2019.
The U.S. Dollar
Now to get started this week, we’re going to begin where we always do with the U.S. dollar index, but we will be looking at all of the major markets, just to clarify. So when we look at the dollar, the dollar is having a very good week. We’re approaching basically four or five-year highs on the dollar, but this is unlikely sustainable. Looking at the VantagePoint key indicators, we can see that our medium-term crossing, our longterm predicted difference is starting to turn lower. Our predicted RSI hitting an overbought condition, it too is starting to turn down. So if we take our dollar index and we draw a trend line inside our predicted RSI that we can see that we’ve got a bit of a problem here.
So as retail traders pour into U.S. dollar longs, they want to, might want to be very, very cautious towards the end of this week. Now in our previous presentation, we were able to clearly call this dollar strength, but now we’re looking for the dollar to reverse after the non-farm payroll number on Friday. Now yearly seasonalities are terrific, but monthly seasonalities are even better in the currency markets. What we see is the dollar strong at the end of the month and strong into the first week of the new month and then mysteriously it just sells off. Now it’s been following that cycle and I would anticipate this one also to follow that same pattern on a weaker payroll number. Now the payroll numbers is a volatile number, we know this, but looking at last months, U6 number moving higher, not lower. That suggests that this report will not be as good, so we will be watching very closely for dollar strength or dollar weakness.
Now I anticipate the dollar to remain stable until probably Wednesday or Thursday of this week and then it’s going to get very choppy in there. So be careful around those times. But again, what we want to watch very, very carefully is medium-term crossing the long term predicted difference with the neural index. And we’re looking for our predicted RSI to stay in this makeshift trend line that I’ve just drawn in. Now, if the dollar continues to strengthen, that will keep the pressure on gold. But in my respectful opinion, gold has been a clear buying opportunity in 2019 and I don’t see anything that has changed that. So gold likely to come under more pressure up until we get the event risk at the very earliest on Wednesday, which will be the ADP report that will give us the first look at this number, but Friday’s the real number.
The Gold Market
When we get the entire report, we get the average hourly earnings, the U6. The real numbers behind the nonfarm payrolls. So that’s what we want to watch. But for now, I can imagine that gold will remain stable with a slight downward biased until later in the week. Now the indicators here are not oversold yet, so we should expect a little bit more downside. Now if the dollar remains stable, that should keep the S&P 500 believe it or not stable also. Now, a lot of different things, but when we look at the seasonality of the S&P 500 it predominantly does not do very well in the month of October. So a corrective move lower is perfectly normal, but again, if we look at the longer-term situation here. Stocks or equities, in general, have really, really struggled here. We have not been able to break through this immediate resistance going back into July 26 of this year, we’re making lower highs.
So again, we’ve got to watch all of these things, but I would also, again, nothing goes straight up and nothing goes straight down. But my primary directional biased has been to sell the S&P 500 on any rally above or even close to 3000. Now, if we can put in a new high on the S&P 500 and make a sustained break of 30, 28 then maybe we’ve got something here. But my optimism on that at this time remains heavily guarded and I make that observation-based around oil contracts. Again, the drone strikes on Saudi Arabia that were conducted by … We don’t know exactly who. I suspect Saudi Arabia might’ve even had their hand in something of this, but again, I don’t think the U.S. has is falling for it. They’re not getting involved with this. The spike in oil, as I had stated weeks ago, is not a sustainable move and we never ever want to trade off of headline news like that because 9 times out of 10 it’s not completely accurate.
So right now, oil is still moving lower. I would anticipate a continued downward move. But again, we’ve got some event risk out there and these drone strikes and everything else that they’re trying desperately to prop up the price of oil. But again, they’re just not able to do it. There’s very little demand for oil. Particularly at this time of year, if you look at the yearly seasonality in oil contracts, it sells off almost every October. And if it’s selling off, the S&P is selling off. So keep an eye on that. But right now we don’t have a reversal signal long on oil yet or on the S&P 500. So right now we should be looking, probably looking at a move towards 54 before we see any kind of real bounce here.
Now what we also want to monitor here, because of the position of the U.S. dollar, is we’ve got a lot of Bitcoin traders out here now. Bitcoin under heavy selling pressure this last week because of the dollar strength. Remember how Bitcoin 2 is traded against the U.S. dollar. So what I’m anticipating is Bitcoin to move down into the $7,517 area, and then I’ll be looking for a reversal on U.S. dollar weakness on that monthly seasonalities. So if after the non-farm payroll number, the following week, Bitcoin starts to reverse and you can see if I zoom the indicators in here on the VantagePoint software, very important. You can see that the medium term is trying to cross the longterm predicted difference, now. We’re in a heavily oversold condition. The probability that we see heavy buying coming in very soon on Bitcoin is I would say about 75 to 80%. So we want to watch this, but we want to make sure that we understand, we actually have a price target using these verified zones.
We can pick that. We’re not picking a number out of the air. What we’re doing is we’re picking that number based around a known failure point. That known failure point is $7,474. So we want to watch this level very, very closely.
Forex Weekly Outlook for Major Pairs
Euro/U.S. Dollar (EUR/USD)
Now as we get into some of our main Forex pairs, once again, I think that the Forex market next week is going to be rather flat. I don’t think we’re going to see a lot of big moves. I don’t think we’re going to see any kind of trending move whatsoever until after that payroll number on Friday. So right now the Euro is challenging multiple, multiple-year lows here. But guys, this is usually the classic setup for a bear trap. So be very, very cautious shorting the Euro down around this 109 area it, simply has not been able to break through there and in my respectful opinion, the U.S. labor report is not going to be enough.
Now remember, if that report comes out soft, that’s going to give the Fed the ammunition they need to keep cutting rates. That is not going to help the U.S. dollar that’s going to hurt the U.S. dollar and the Euro will indirectly benefit from that. That is a real-world possibility. So we’ll keep an eye and monitor this. But as you can see, the VantagePoint, AI predictive indicators, the medium-term crossing, the longterm predicted difference is starting to cross. It’s warning us days ahead of time that the Euro could be getting ready to reverse higher. Now if it does, it’s going to reverse back towards the 110 area. It will likely park itself there prior to the non-farm payroll announcement. If we get a good number, Euro goes down, we get a bad number, the Euro breaks out from the 110 area. That’s what I would anticipate happening.
Now again, our predicted RSI is not pointing down, it’s turning back up. So again, we’ve got multiple warning signs here when we’re not looking at conventional indicators that are telling us that if the Euro is this bearish, maybe it’s mostly retail traders that are on the side of that and big money and the banks are getting ready to go the opposite direction in a known period of dollar weakness. So again, that weakness will come after the non-farm payroll. And as I’ve talked about in previous weekly outlooks, I’ve seen absolutely fantastic numbers on the payroll number. The U6 number dropping by two or three percent. Fantastic numbers all the way around. Yet the dollar sells off right across the board. So somebody with real money has to buy dollars at certain times of the month and sell them at certain times of the month. So we want to monitor that. Okay.
U.S. Dollar/Swiss Franc (USD/CHF)
Now when we look at our additional Forex pairs, the U.S./Franc. We can see that the U.S./Franc is really struggling to break through this area around .9970. Any move higher is met with selling. This once again points towards weakness in the global stock markets. Now, what was kind of humorous the first time I think I’ve ever heard it was on Friday on CNBC when the DAX, the CAC 40, a number of the different global equity markets were in rally mode. But I noticed that the announcer said one thing and they said that this rally is not based around demand for equities. It’s based around the weakness in the British pound and in the Euro. That is a completely accurate statement, but it’s probably one of the first times that I have ever heard them say that.
So they’re noticing these things. They’re noticing in our market correlations. They realize that there isn’t actually demand for those global equity markets. It’s the currency is causing the problem here. Remember guys, the currency market is $5 trillion a day. If you take all of the global stock markets and futures markets combined, they’re one 10th the size of the Forex market. So the announcers, the pundits on TVs, they’re starting to take notice that the currency market is the driving factor. So if the equity markets more specifically, the S&P 500 cannot hold and continues to sell off, then it’s a one-way ticket lower on this particular pair. Our predicted RSI is pointing down, the neural index is pointing down. But again, the main thing with trading guys and the benefit of these verified zones is you want to make sure you’re identifying the range that you’re trading in.
So when I look at this, the top end of this range is .9983 and the lowest point in this particular range that we’ve seen is 98/44. We are likely to maintain this range until after the non-farm payroll, but we will again be monitoring the VantagePoint indicators very closely.
British Pound/U.S. Dollar (GBP/USD)
Now as we go into the pound dollar for next week, once again, we’re sitting at a pretty big level here at 1.2280. A lot of rumors circulating that, that’s it for Boris Johnson. He’s on his way out. So if that’s the case, we could see a violent reversal higher on the pound next week or the week after. Be very mindful of this, guys. Again, indicators are still pointing lower, but either way, I anticipate the pound will recover within the next 7 to 10 days and start moving back up. If Boris Johnson is out and they’re basically the Brexit is getting an extension, then that will likely fuel a rally in the British pound, but that’s a major event risk in a variable we want nothing to do with Okay. Let it settle itself. Then we see where we’re going, but be on guard here guys for a potential fantastic long. We know that the lower end of this particular overall range is coming in down at or about the one 1.1950. That is a long term bottom here guys, again, we want to watch this closely, the developments with Brexit because that will determine and the fate of Boris Johnson will determine the next move on this particular pair.
U.S. Dollar/Japanese Yen (USD/JPY)
Now with the dollar-yen, again, this is basically an equity trade, meaning the Nikkei and the S&P 500 high, high correlation. As long as the global stock markets are okay, dollar-yen will hold onto its gains. But once again, if we look at the seasonalities, it’s unlikely that the equities are likely to hold onto gains in the medium to longer term. Maybe in the short term, but in the medium term going out three or four weeks from now, it’s very unlikely.
So we have two major resistance zones that we have to be mindful of. That starts at 108.47. The secondary one, which I think will hold again is 109/31 and even bigger resistance zones above that. So when we look at this, but right now the predicted RSI is failing at the 60 level and starting to point down. We’ve been basically bouncing off this tee cross long our main pivot areas 107.54. So we want to watch that particular level. Right now the dollar-yen will likely remain sideways for the entire week leading up to the non-farm payroll. With a slight downward bias. But remember, keep an eye on the S&P 500 if it’s going up, dollar Yen’s going up. If the S&P 500 sells off dramatically, dollar-yen and the U.S. Swiss franc are both going to extend lower.
The Commodities Currencies
U.S. Dollar/Canadian Dollar (USD/CAD)
Now when we look at our three main commodity currencies going into next week with starting with the Canadian dollar, against the U.S. dollar, the U.S. CAD pair, significant resistance, we can see the value in the verified zones. The market hitting this verified zone four, five days in a row, and then as it cannot break through that VantagePoint, verified zone, the market slowly starts to grind it’s way lower. But again, if we look at the indicators in the software, this is not a mystery guys. When we’re using AI technology, we can see these clear as day and this is what we want. So this medium-term crossing the longterm predicted has sent this payer lower. But again, I don’t think that this pair is out of the woods.
The Canadian dollar has a very, very significant correlation to oil and to stocks. If oil and stocks continue their downward slide towards the end of the week, the U.S./CAD is going to move higher, not lower. The seasonality on this pair is it goes higher basically every October. That’s what I’ve seen four of the last five years. So a very powerful seasonality there. If we look at U.S./CAD, even if we look at where we’re trading now and we look back one year ago, there is the seasonality. That’s how easy it is to view seasonalities in the VantagePoint software.
If we go back one year, we can see it. If we go back two years, we can see it there again and so forth. So I can play that game all day long and go back and count how many years that it did this. Now currencies are very repetitive guys. Nobody has to buy a stock, nobody has to buy an option, but they do have to buy and sell currencies, okay. That’s why currencies only move one percent of their value per day and that’s a very important statistical fact. Currency, the Forex market is not volatile. People make it volatile by over-leveraging their traits, right?
So when we look at U.S./CAD right now, very easy for us to identify using these VantagePoint indicators. The highest 1.3308. That’s what we’ve got. The low end of this particular range where the buyers will look to step back in is down at or about the 1.3133 that’s what we want to look at here, right?
All of the indicators from VantagePoint are saying, we’re still going to go a little bit lower. If this is going to reverse guys, it’s going to be on Tuesday. It probably will make a big move down on Monday and then completely reverse on Tuesday. Watch for that opportunity.
Australian Dollar/U.S. Dollar (AUD/USD)
Now as we look at the Aussie, U.S. and the New Zealand/U.S. very, very similar trades here. Once again, you can see the market building support here down at this .6740 area. Very important. We’ve got three days where we’re stalling at this particular level. We’ve got our medium-term crossing, our longterm predicted difference and a rising RSI. Suggesting that the Aussie could actually move higher despite everybody telling us to sell this. So keep an eye on this level, but either way here guys, the secondary verified zone, which is coming in down at or about, you can see around this .6780 mark or .6680 mark approximately. I believe that area will likely hold.
We’ve got an early warning sign of a reversal long trade in the VantagePoint software. So again, the immediate zone you want to watch is .6740. Now we’re closing just above that to finish the week. We’re not off that by much and one could argue that at that closing price of .6761. That there is a trade there now, as long as you’re putting your stops below the lowest point, which is .6770. So keep an eye on that. There could be something.
New Zealand Dollar/U.S. Dollar (NZD/USD)
Same as New Zealand, U.S. New Zealand is by no means as weak as the Aussie. The New Zealand is, again, you can see that medium-term crossing our longterm predicted difference. We just need a catalyst to get this thing moving, to make a move to the upside.
Now, if the stocks recover, that will help the Aussie and the New Zealand. So watch these particular pairs for reversal trades. So with that said, this is the VantagePoint AI market Outlook for the week of September the 30th, 2019.