Flash Alert! Bullish Set Up for Euro Profits
RoboInvestor – June 18, 2020
Market Hits Pause As Virus Numbers Rise
Certain states are seeing COVID-19 caseload and hospitalization numbers rise as a byproduct of the reopening of economic activity. While it was fully expected that this would be a given, there are some hot spots in Texas and Florida that have investors viewing it as a caution flag that justifies booking some gains from the torrid rally.
Sector rotation has been extremely healthy
Last week’s trap door sell-off put the market on the defense as it called into question if stocks had rallied too far, too fast. And for some stocks, it’s a valid case. However, sector rotation has been extremely healthy and thus any corrections will likely be well contained after Fed Chairman Jerome Powell gave a highly reassuring testimony on Capitol Hill this week, outlining the Fed’s plan to backstop the economy at every turn.
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“I’m investing my own money in each and every stock as my AI platform identifies.”
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
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SPY between $306 and $317 levels for the near term
For the near term as I see it, stocks will continue to trade between $306 and $317 levels using SPY. TLT and DXY continued to move to the downside confirmed the short-term bottom at $293 and short-term bullish reversal. SPY overhead resistance is at $323 and the short-term market is overbought. The market can continue to make incremental gains in next 1-2 weeks but is prone to a sell-off.
SPY between $275 and $330 for the next 4 weeks
I expect the market volatility and the two percent daily market moves to persist. SPY top is set at $322 and the market can potentially retest this level in the next 1-2 weeks. The market can overshoot support and resistance levels when VIX is elevated. Short-term support is set at $293. My strategy is to buy 10-15% market corrections. Based on our models, the market (SPY) will trade in the range between $275 and $330 for the next 4 weeks.
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One byproduct of the Fed’s current fiscal re-fueling of the credit markets is a strong downward overhand on the U.S. dollar. The one-year chart of the U.S. Dollar Index (DXY) shows a material breakdown of the world’s reserve currency under the weight of record-setting deficit spending by the Fed, the Treasury, and Congress.
While the Fed and step in and buy dollars to support the currency, and one would think that they will if the dollar loses further ground, the greenback is sending a strong signal to markets that unlimited printing of money has a cost. And that cost is underlying valuation against other currencies.
Clear-cut winner from the dollar’s devaluation has been the euro
The clear-cut winner from the dollar’s devaluation has been the euro, which has rallied in recent weeks. Although the ECB is also in the money-printing business, it pales in size to that of what the Fed is doing. While the ECB is sponsoring QE in the hundreds of billions of euros, the Fed’s bond-buying program is in the trillions of dollars and climbing.
We’ve traded the Euro Trust Currency Shares (FXE) for our RoboInvestor Portfolio during the past two years when these currency trends take hold, and now again is one of those times. Looking ahead of putting this trade on for our RoboInvestor members, I employ our AI tools to determine the proper entry and exit points for such trades.
Our AI-driven Seasonal Chart shows that shares of FXE are overbought within the 20-day range and then turn bullish within the 30-40-day range.
FXE on our short-term watch list
This means that we want to put FXE on our short-term watch list, and when my AI indicators flash green for the 10-20-day periods, we get long on my signal. And that’s the most important point I can make. We trade on my signals. RoboInvestors don’t have to figure anything out. They simply have to follow my lead, entering orders to buy and sell per my well-laid-out trade parameters.
This is true with every trade, and we only trade the highest-quality blue-chip stocks and ETFs that are institutional favorites, hugely liquid, and have a robust corresponding options chain that trades like water. I personally participate in every trade with our RoboInvestor members.
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We’re booking profits 88.36% of the time we put our investing capital to work
I encourage all readers of this column to take me up on my offer to lead your investing path toward steady wealth creation. We’re booking profits 88.36% of the time we put our investing capital to work. In this industry, it does not get better than that! Make a timely and intelligent decision today and come alongside me. I look forward to welcoming you to our family of RoboInvestors.
(Want free training resources? Check our our training section for videos and tips!)
“I’m investing my own money in each and every stock as my AI platform identifies.”
And remember we’re not talking about day-trading here. I’m looking for 50-100% gains inside of the next 3 months, so my weekly updates are timely enough for you to act.
Click Here – To See Where I Put My RoboInvestor Money
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