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. 

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