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Category Archives: CAD

Canadian Dollar Bullish Phase Update.

Late 2017 saw a bearish move in our Canadian dollar. Last week our dollar came alive corresponding with a jump in our Canadian Select oil prices. To spend all my  time, researching fundamentals why prices go up and down is an exercise in futility. The majority use fundamental analysis, but since when has the majority been right at major turning points?

I will stick with a potential zigzag bull market in Minor degree for now, but will change it in the future once I can see a better fitting alternate. Sure, analysts have portrayed Canada with booming fundamentals, but remember fundamentals will always tell you the wrong things at the extremes. In the wise words of Rick Rule, “if you’re not a contrarian, you become the victim”,  is applicable in conventional terms and in the Elliott Wave Principle as well.  Getting trampled by the herd is not something I wish on anyone but the sad fact remains, investors as a herd have no memory.

Our CAD is not set for a super bullish phase as it might have to roll around and frustrate the analysts much longer. Short term a potential diagonal wave structure could push our Canadian dollar much higher.  The spike that developed last week, could be a sign of a potential correction to come, but it may take many weeks before we know with any kind of certainty.

Canadian Dollar Cycle Degree Review

Our Canadian Dollar created a beautiful spike in Late 2007, just a bit before crude oil peaked in 2008 about 6-7 months later.  As we can see that the 2007 peak has never been exceeded. We can also see how violent these leveraged asset classes can behave.   The season contrarians saw the 2008 CAD crash coming, so it was not a surprise to a few of US.  The vocal majority of analysts were overwhelmingly bullish in late 2007,  as they thought our CAD would keep going up with oil. After all, oil was heading into $200 at that time. Right? 😎

By early 2016 the CAD created a spike to the downside after which it started to rally again.  Lately the CAD has corrected, but it sure looks like an expanded pattern may have played out as well. To help confirm that the CAD correction is over then, another leg up should happen.  Analysts love to connect our CAD to oil, but that may just be a simple explanation, that they use over and over again. 

Canadian Dollar Intraday Rally Review

Our Canadian dollar has been working its way up in the last few days, and there may be more to come. There is a good chance that this rally is also a 4th wave rally, which means one more low can also happen, before another much bigger reversal may present itself.  This one pattern, borders on the line of an expanded pattern,  so when they form it’s almost guaranteed to hit a new low. It all hinges on,  if the pattern is identified correctly in the first place.  

After this plays out, then we could bottom at a wave two in Minor degree after which the CAD should start to crank up again.

On the daily charts the big first drawn out corrective waves, can also be a triangle which means the any “C” wave bull market will end up being a bull market.    

Canadian Dollar Daily Chart Update

Our Canadian Dollar, had a good run, but for the last month or so it has been on a steady decline of diagonal wave structures. No real zigzag stands out at this time, but the CAD has made a fast move to the downside this morning.  The entire structure from the early 2016 bottom,  has a zigzag written all over it, but is still not quite long enough, to make it a better looking zigzag.  In order for the commodity bullish phase to keep going, I’m sure the CAD has to give us more upside as well. 

The angle of the A5 wave and C5 waves are about the same angles which could support the zigzag idea as well.  For all of 2016 and early 2017 the pattern fits well into a potential triangle which also indicates a higher degree change must take place.   The commercials have been net short but they work better when their net ratios become extreme.  At the  $.78 and $.79 price levels, we may see some support, but a worst case scenario would be a complete 2017 retracement. 

If that happened then we could end up with an expanded “B” wave bottom, after which another bull market can start. 

Quick Canadian Dollar Update

In the last few days our Candaina dollar has broken the $. 80 price level, but it has done so with a “C” wave looking exactly like the “A” wave but with slightly smaller wave structures.  I don’t think this is enough of an alternation, to call any zigzag completed. These patterns could start to turn far more violent if any “C” wave bullish phase still has more room to go.

The top trend line could be too conservative, as “C” waves can stretch far more than what we think. Nothing in the real world markets are those pretty even waves that they show us in the EWP.  If you do find them, chances are good that you are on Planet X already! 

Our CAD could continue this way and not clearly subdivide at all, but both scenarios should still push our CAD higher. 

Canadian Dollar 2008-2017 Elliott Wave Review

Once in a while a wave pattern shows itself, which is the perfect time to take a look at the bigger picture. After I looked at the Tesla zigzag, and then saw the same pattern in our Canadian dollar bullish phase, then this bull market has a good chance of being in a diagonal 4th wave rally. 

The A5 wave in our dollar is the exact same looking pattern as the A5 wave in Tesla. Could it still be a “D” wave? I will not rule it out as I like to keep a few options on the table. My bet is that this “C” wave bull market will have a bigger recognizable wave structure, that would alternate with the “A” wave. In zigzags it is the “A” wave that can be very steep and the “C” wave would have more subdivisions, reducing the speed of the decline and its angle. 

In flats this is usually reversed, as the C wave would be the steepest part. 

Alternation is the name of the game, as the pattern never repeats itself completely. How high could this go? It seems like 94 may act like a brick wall, as the 93 price level would start to interfere into wave 2 in Intermediate degree. Technically the 4th wave can dip into wave two if it wants to, but then we would need for a zigzag crash to follow. At 89 we would be getting close to the top trend line of the zigzag, but we know it can squeak past the trend line with ease. 

If you look at the Tesla “A” wave and the CAD “A” wave, then you have two pictures of the same pattern, which can be used as a reference,  to look for other “A” waves just like it. 

From what I see, I you would have to stay bullish on our Canadian dollar. Of course the higher it goes, it will start killing our manufacturing industries.  The 62 price level is the ultimate bottom, so this would be a critical price level to watch, a few years into the future. 

Canadian Dollar, A Look At The Weekly Charts

This weekly chart is  showing about 7 years of history. I believe our Canadian dollar also finished its Cycle degree wave three,  and that it has been in a bear market ever since.  In early 2016 that story changed as the CAD finally woke up and charged straight up.  At first glance I could turn this into a potential 5 wave sequence, and give you the idea that the CAD is heading to new world record highs. 

The problem is that fast starting moves like this is more likely to be an opening “A” wave, which have limited life spans. We had another potential bottom in early May, so that means the CAD eventually has to clear that Intermediate degree I’m showing. Any “C” wave bullish phases can turn into a diagonal with the C5 wave starting to get bigger.

When that happens, we can scratch our heads and ask what is happening, but from my perspective, this would be very normal as zigzags always alternate between the A5 and C5. It is the B3 wave that can give us all the problems. 

The CAD has lots of room to move up, but limited downside. Last weeks COT report had the commercial add a substantial amount of long contracts, increasing their already very strong net long positions. As usual the speculators are doing the opposite and have been adding short positions.   The CAD has much better odds of going up than it ever has of crashing to new record lows.

Combine that with the Market Vane report, the CAD is coming from an extreme low reading of only 6% bulls, which is an extreme reading by any definition.

When all these indicators have reversed their positions, then it will be time to make another wave count assessment.  For the next year or so, or until the CAD has a strong upside breakout, I will keep a bullish outlook for our dollar. 

Canadian Dollar 2007-2017 Cycle Degree Review

 

Our Canadian Dollar, saw its major peak back in late 2007, roughly matching the crude oil peak. As usual, the majority were extremely bullish back then as they kept revising the CAD higher.  Finally the CAD spiked to the upside which was part of the Runaway Leg up.  No commodities asset class can stay in a vertical accent for very long, not as long as some of the Runaway Legs do in stocks.  One main reason is leverage, and the fact that commodities run on fear, not on supply and demand fundamentals, which are lagging indicators. 

Then the 2007-2008 crash behaved more like a 3 wave crash, as the declining angle was very sharp, compared to the declining angle from mid 2011-2016.

Overall, our CAD has been in an 8 year bear market, as the 2011 peak has been completely retraced. In the early part of 2016 the Canadian Dollar soared after which it went limp, when the bearish phase seemed to have returned.  For now I show a potential 4th wave bull market, but it could still be a “D” wave as well.  The CAD 2016 bullish phase should still be in force, and I fully expect the CAD to break out, with at least one more major leg up.  Any 4th wave rally will have some stiff resistance, once it gets to the previous 4th wave. 

Sure,  our CAD can go much higher, but after that another complete wave count is warranted. As it stands, we would only get a single flat, followed by another super bull market. This idea is not written in stone or burned into my brain just yet, as an 8 year, non completed bearish phase does not fit. Maybe we need a 13 year completed bearish phase in our CAD, which makes a much better Fibonacci fit. 

The Market Vane Bullish Consensus Report recorded one of the lowest bullish readings I have ever seen. Only 6% bulls were hanging around down in 2016.   The CAD registered a high of 51% bulls, which I think will get surpassed again, by a much larger margin.  Any reading near 5-10% bulls,  I would consider as an  extreme reading, and should never be ignored. 

Canadian Dollar 2008-2017 Review

 

 

Many are fearful that our CAD is going into the toilet due to all the trade agreements being renegotiated or even canceled. I think that fear is misplaced as the 2016 bottom may have been an 8 year record low already. The CAD is in the US dollar basket and holds about a 9.1% share when I checked this morning.  All the contrarians have always used the CAD as an inverse indicator and at this time nothing has changed.  The US dollar is already imploding, which gives commodities a big boost, and the CAD will benefit as well. 

We should see a “C” wave bull market still to play out and this may have bigger wave subdivisions than smaller ones when the CAD bull market started.  None of the COT reports regarding the CAD help make a very bullish case, but that may even change as time moves forward. 

 

Canadian Dollar Weekly Chart Bear Trap Review

 

d6y00-oct-21-2016

 

I made some adjustments to our Canadian dollar wave count, but a potential “B” wave correction is still in progress.  There is no way that I can give any accurate price support level, as moves like this can stop on a dime and turn north one more time. Commercials also did the right thing, by adding to their net long positions last week.

Our Canadian dollar or “Peso Of The North”,  should end up getting a better reputation as it resumes its bullish phase. The choppy decline makes any correction seem to take longer. Eventually we should end up with a higher low, and then it may be worthwhile to draw one set of parallel bullish trend lines.  Trend lines and indicators are abused tools, that the majority use, but they are all short term indicators that do not allow you to stay in a trade for many weeks or even years. 

All these indicators that the majority use is such a 70’s thing.  They are useless if we can’t see a bottom or the start of a bull market, besides insiders blanket the charts with indicators where you no longer can see any waves. This is the oldest trick in the book, as these types of charts are trying to baffle us with bullshit! 

Canadian Dollar 2007-2016 Weekly Chart, With A Cycle Degree Review!

 

d6y00-oct-3-2016

 

Many of the commodities are not behaving like I would like them to. The reason can be because of the location of Cycle degree wave 3. Last week’s commercials have now switched to a net long position, which helps to make my case for the wave count above.  In this case I have moved my Cycle degree wave 3 position back in time, which basically does the same thing as travelling into the future, on paper only.  This may be  the first time that many of  my readers  will see a Cycle degree wave 3 at the 2007 peak.  I know that I tried this before, but I have to dig through my scanned charts to help confirm it. 

If I gave you the short version, we are looking at a potential triangle, and that a “D” wave top would be the next big target that should get hit. This may happen closer to the top of the parallel lines, as zigzags do have a tendency to stretch.   It may take some time, but chances are good “all” my commodity wave positions will have to be moved, which includes the currencies as well. 

The source of my US dollar wave counts came from EWI and based on a constant dollar, which creates different peaks and valleys. A constant dollar is about the same as an inflation adjusted chart. I dislike or should I say, “I hate inflation adjusted numbers in anything”. The only important inflation number we need to see is the one that goes into your trading account, and increases your net worth. 

The short term commodity outlook has not rallied changed, but investors are going to get a big surprise when this bullish run starts to lose steam. 

I will not give  frequent intraday reviews with the Canadian dollar, but will certainly try to catch a few good turnings, until we reach the potential “D” wave peak. 

CAD, Canadian Dollar Daily Chart Wave Count Review

 

D6Y00-July-28-2016

 

I think that our Canadian dollar has had enough time to make a good correction, and it could be time for the CAD to turn. If so we are getting close to finishing a regular flat, that would suggest a pretty strong showing to come.   I will go with this 1-2 wave in Minor degree at this time, as this market has to prove itself, even though I know that traders’ commitments may be short the CAD. Everything looks good, but only time will tell, what pattern the next leg up will present to us.   

Sometimes the same type of pattern just implodes and then soars up higher again, so we should always be looking for the unexpected to happen. 

Canadian Dollar Intraday Correction Review

 

D6Y00-June-10-2016

 

Since early 2016 our Canadian dollar has started to soar. This is a good thing as it closely matched the oil and gold rally as well.  The CAD also looks like it wants to soar with the next sequence all set to go.  Not so fast, as this correction may still need to fully play out. Our present little rally is too choppy to fit into a clean impulse wave, as we could be just at the tip of small degree “B” wave top, and we would still need the trailing “C” wave, to complete.  

I have labeled this as being part of an inverted move, as many of these moves start out the same way as an impulse does, but then they completely fall apart after that. In other words, an “ABC” rally  can be the exact same move as the start of a 1-2-3 wave pattern.  If we still get a move down to newer lows, then this would be a great setup for the correction to complete, and I would have to turn very bullish on the CAD again. 

I started this count out as an inverted move, but we would have enough time to see if a wave three top forms, or if it was a “C” wave bull market. With both patterns we could end up with another spike to the vertical side.  One pattern will be very choppy and the other could be a smooth impulse pattern, and until that “C” wave or wave three fully shows itself, the wave count doesn’t need to be changed. 

The CAD had about a 12 cent move to the upside, so after any correction, we could get another 12 cent move, which could bring us closer to the 85 cent price level.  When this happens then it will be time to review the entire move to see which one wins! 

Right now I am bearish on our CAD, but that would definitely change once a correction has shown itself.   

Canadian Dollar Intraday Review

 

D6Y00-June-7-2016

 

Our Canadian dollar has also been in a roaring bullish move, which should have lots more upside to go. Just to be on the safe side, I used an “A” wave in Minor degree as a strong top, but this may have to get adjusted as time goes on. Of course, if the “A” wave top is a wave 1 then there would be lots more upside to go.  This will all depend on, if the end of this move creates a major spike to the upside with many inverted zigzags.  

Right now the CAD looks like it needs a correction, but not too big of a correction if this bullish cycle is set to continue. 

Canadian Dollar Intraday Crash Review

 

D6Y00-May-19-2016

We have seen a pretty good crash in our Canadian dollar  and we will see what type of a pattern it will make on the way down. Otherwise, our CAD could have been a big fake rally and we would be heading to a new record low.  Our CAD has been in sync with any commodities bull run in the past, so hopefully we will see more of a CAD rally. The sad part is we have to go through a correction before we will find out. I’m keeping it open just in case we get another inverted zig zag bull market.

If another wild move happens to the upside, we could be at an expanded type of a “B” wave  top.  This will be a shorter update as we are not at an extreme just yet, so things can still go in any direction. 

Canadian Dollar Gets Slammed!

 

D6Y00-May-4-2016

Our pathetic Canadian dollar or our peso as some like to call it, was stopped dead in its tracks, which was no surprise as I have been warning about this for some time. The problem is what’s next? Any wave 2, can go all the way down to a  61% correction, or even more.  To say the least that is not reliable, as it even could stop anywhere in the 40% to 50% range, depending on the strength of the overall market.

The higher it will eventually go the closer we will get to another recession as we were in the middle of a recession the last time the CAD peaked out in 2008. Oil has also been declining, but oil is in a small rally right now.  What we have to look out for is a corrective type of a decline with a good looking trailing “C” wave.