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Category Archives: CAD

Canadian Dollar Weekly Chart Update

 

When any wave positions I have, that do not seem to fit well, then I try and review  any 5 wave sequence I might be working on.  In this case there is still a very good chance that our Cad still has to crash to a new record low, even if it just makes a brief double bottom.  The only way that I can make the 4th wave fit, is that the 5th wave is a diagonal wave structure. An inverted zigzag 4th wave is still the best fit. Commercials have a net long position, but not enough to turn super bullish on our dollar!

Our Canadian dollar has to soar to support a surging gold price, but this is still far away from happening. The AUD has far more commercial net long positions, with a ratio of more than 5:1.

The CAD Market Vane Report (MV) is fairley bullish, with about 47-48% bulls present with Tuesday’s report that leaves lots of room for bulls to come back in.

Even when some COT reports get to an extreme, they can make dramatic shifts, but dumping longs, at the same time they take on short positions can extend any trend.

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Canadian Dollar 2002-2018 Update

 

Our Canadain dollar wave positions needed some work. Last week things changed as many important COT reports had strong shifts including our CAD. Hedgers are still net long while the speculators are net short.

I started wave tracking the CAD back in the late 1990’s. At that time it was a wild ride, and it looks like it might do it again. I moved my Cycle degree peek over to the 2011 peak, as that matched the gold&silver mania bubble in 2011.  All commodities are linked together with zigzags and the twin tops show how related or CAD is to both gold and oil production.

What followed in 2011 was a swan dive that had a big bear market rally and followed by a set of 5 waves smaller in size. The late 2007 peak has a huge spike in it, then eventually another major spike at the 2016 bottom. CAD and oil like two pea’s in a pod! What followed in 2016 was a wild ride that looks like one of the best zigzags ever formed, which has not changed.

The crash into 2016 is a zigzag with a long tail. The 1929-1932 crash did the same thing so, if it happens once than I  look for that pattern all the time. The next big zigzag is in progress but the Primary degree “B” wave is not even close. “B” waves can contain flats that start out with smaller degree zigzags, and our CAD fits that very well right now.

If we maintain a bearish CAD veiw we will be wrong every step of the way as a new bullish phase may have begun.  5 waves up in Minor degree is on the menu, but it looks very choppy on the daily charts. That’s ok, as it looks like a diagonal wave structure is starting to form.

Our CAD is not going to the moon, but it can head to a triple top, in the next few years.

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US Dollar Weekly Chart

 

The US dollar had been running north but the hedgers, (commercials) have increased their bearish positions on the US dollar. Many COT reports have seen strong reversals of positions, so it’s not just the USD. Long term the US dollar is on a major bull market, but during any USD bull market correction will send the price of gold soaring. I was looking for 5 impulse type waves but the next low could very well dip into what used to be my wave 2 bottom, but now I have to work it as a diagonal wave 1 in Primary degree! Diagonal wave structures are very common in all commodities, which are just zigzags connected together. Small zigzags to very large zigzags is the rule not the exception, as we will find very few flats, except for zigzag corrections.

Flats are pretty rare in commodaties, so knowing  how to count connecting  zigzags is very important.

The 2008 low in the USD, was a 23 year low, from the massive 1985 US dollar peak. (British Pound bottomed the same year) That 1985 peak is a Cycle degree wave 3 peak with 2008 being the 4th wave in Cycle degree.

If the USD still implodes this year, then gold should soar. What will happen with crude oil remains to be seen, as the gold/oil ratio will not stay at 17:1!

It may be hard to understand that the US dollar is in a huge bull market, but that only concerns gold investors, it matters little to traders who can bet in either direction, up or down.

This big US dollar bullish phase is heading up to Supercycle degree wave “a” and may not arrive until 2041. The USD could arrive 3 years earlier as there is a 3 year difference between the USD and gold.

For years I counted the USD as a big bear market rally but it sure fought my wave counts every steep of the way.

 

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Canadian Dollar Weekly Chart Update

 

I see the trend with our Canadian dollar as still be down. Since the 2011 peak coincided with gold, the CAD bearish phase really took off. From the 2016 bottom we have what is nearly a perfect inverted zigzag, which are just bear market rallies. To confirm this the CAD must still completley retrace its entire move below the 2016 low. Commercials are already building up their net long positions but that can swing just as fast. Not until the hedge funds turn extremely bearish and commercials far more skewed, can I turn bullish on our Canadian dollar. Even the Market Vane report only shows about 50/50 bullish readings, which is not even close to being extreme at this time.

The CAD started a decline but it has been very choppy just like a diagonal wave structure in a 5th wave can be.  Even when the chart is still fairly high, our CAD can free fall the rest of the way to a new record low.

The Death Cross has already formed in the daily chart but is still a bit short from the Death Cross on this weekly chart! What has more power? COT numbers or another Death Cross. Hopefully we will find out more this fall, as I put my vote on a Death Cross having the real power!

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Canadian Dollar Weekly Chart 2002-2018 Review

In late 2007 our CAD peaked, and then started to crash. The angle with few subdivisions is normal in a zigzag type of a crash. Cycle degree wave three peaked in 2007, and the entire formation sure looks like a zigzag from my perspective. This is what gold will eventually look like in about three years time, so we have lots of real world examples to look at.  Yes we had two bottoms in the Canadian dollar bear market, but many times we get three bottoms, like in a triangle. Gold investors need for the CAD to soar if the USD is going to plunge.

Since the 2016 bottom the CAD soared, but I see this as a classic 4th wave zigzag bear market rally. All bear market rallies retrace back to the point of origin and lower.  Until that plays out I remain very bearish, as our CAD has still a long way to fall. Commercials are net long already but I think the 50-200-day MA Death Cross has more power. The Death Cross has completed in the daily and weekly charts, with the monthly crossing still to come.

My Market Vane report only shows 50/50 bulls present which means nothing to me, as I look for skewed numbers, like only 6% bulls present. The  two days last week were 50 and 50, which I would like to see below 30% bulls. We also have a huge falling wedge which itself is very bullish, which will be for a future CAD bullish phase. This bearish phase is far from over as Canada is still going to get hit hard because we produce a lot of commodities.

 

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Canadian Dollar Weekly Chart Bear Market Rally?

Again we can see how much hell and havoc a Death Cross can bring as it forecast the implosion of the CAD back in 2013.  The CAD has been in a declines and shows not signs of imminent reversal. Besides where’s it going to go to. Gold bulls are wrong if our Canadian dollar keeps heading south. The commercial traders are net long the CAD already but it sure looks like numbers don’t matter when another Death Cross is coming up.  We had our Death Cross, then just recently another Golden Cross which is extremely bullish right?  Well no, as another Death Cross is now due and it would only take another small dip in the CAD and the 200-day MA will get sliced in two.

The CAD 5th wave decline could end up being so bunched up that it will become difficult to track. Eventually the 4th wave in Minor degree will cause ultimate confusion with many over lapping wave structures. It’s the final ending plunge that could get very long. Sure commercials reports are extremely important but those folks have far less risk than what the speculators have, and the numbers can stay skewed for a very long time.

The speculators are the ones that are increasing their short positions so they are geared up for any CAD decline. We can always count on the speculators to get into a trap as they are very good at it.   I have what I call a “Wave Pool” which can contain 50 asset classes and their wave counts all bubbling and boiling in relationship to each other.

When some wild forecast comes out and this goes against the grain of anyone of my wave counts in the “pool” that chart will bounce or do nothing. When any expert or real world event does not stir up the pool then this news is irrelevant and has no real impact on any other wave counts I have. The short explanation is if some wild forecast does not force me to run and change wave positions then this forecast will be wrong and another worthless opinion.

The wave action in this pool are my bullshit detectors and I got 50 of them working for me at all times. About 25 futures wave positions and 25 ETF positions. It was amazing to see this work as I have listened to wild forecasts that just shocks the gold bulls. Yet not a single wave in my pool needed to get changed one bit. All my wave counts in this “Wave Pool” did not miss a beat which confirms the majority of what this wild forecaster had said would happen. I will elaborate on this pool action more and until I saw it happen for the first time I wasn’t paying attention. You can bet I’m paying attention to it now and have been for sometime. We all need a bull shit detector as this world is throwing out crap that needs a Sherlock Holmes detective to figure out in what the facts are.

Any good wave count should never harm a good trading account as I use the EWP as a “value added” analytical tool. A good wave count should above all save you money if we can avoid a meltdown. If any wave count does any damage to your trading account then we better throw that wave count out the window as fast as we can. Elliott wave is all about enhancing value not destroying it. If any wave count causes you to miss a major move, then it’s not enhancing your world or mine is it?

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Canadian Dollar Daily Chart Death Cross Update.

Death Crosses just keep on coming so I added our dollar to the club.  A Death Cross  is a serious indicator that a longer decline is still in progress. Our CAD is crashing and it will continue to crash until a new record low in the CAD is established. This is not hard to understand if you believe our CAD just came from an inverted wave count. This means a bear market rally has taken place. The markets must confirm this bear rally by retracing the entire bullish cycle, that started with the 2016 low. I switched the CAD to a weekly chart and I saw it contained two Death Crosses with this one being the second. Death Crosses are not short term phenomena, as they forecast longer and deeper moves to come.

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Canadian Dollar Daily Chart: Still Sinking Like Rock!

Our Canadian dollar has continued to implode, which has not disappointed my bearish outlook on our dollar. The June decline was a diagonal which can happen in 5th waves. They may look corrective which can fool the best of us, but diagonal waves are one of the best waves to give us a clue as to the location we are at. When I see wave analysts completley ignore diagonal wave counting, then I know that the analysts in question are just guessing at their positions.

Since we are getting close to ending this 5th wave, we should expect some type of a rally. How soon that will happen is always a flip of the coin as these 5th waves can extend beyond what we may think is normal. In commodities wild swings are very normal as fear is the main driver in commodaties.

If gold is supposed to go on this wild bull market then we need the CAD to fly as well. Clearly this is not happening. We need one more counter rally that is one degree smaller than the two showing and then after that all counter rallies will be 4th wave rallies. These 4th wave rallies will all end by one degree higher each time. This unfolds the same way if we started on a 5 wave bullish advance. This is wave 1-2 base counting, which always looks for wave 3 to extend first. The size of my wave 1-2 in Minor degree already hints that we may get a very short 5th wave when we get there. It’s also after the second set of 1-2 waves when extensions can really start to kick in.

Canada is heading into a recession if we like it or not, and it’s only a matter of degree how bad it can get. History has not been kind to Canada when trade wars erupt, even if it is mostly just hype.  When the worst does arrive, my contrarian instincts will turn very bullish as a new gold and oil bull market will grow from the depths of a price crash.

Markets will always move in the opposite direction of what the majority think is going to happen. If we get caught up in the same bullish rhetoric as the majority, we will end up suffering the same results as the majority do. In this world, if your not a contrarian you will end up becoming the victim!  You can only run with the bulls or bears for so long, before they all turn against the participants. Right now the bears are in firm control until all 5 waves have fully played out.

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Canadian Dollar Daily Chart Bear Attack Update

At the peak in September 2017, analysts hyped our Canadian dollar along with the oil price.  After the “C” wave bullish phase completed, it also completed a wave 4 peak in Intermediate degree.  At this time our CAD has not developed any pattern that shows us that a bull market is coming. In fact the exact opposite is happening. The experts have little knowledge of the damage that can be done, when we are bullish but the opposite happens. They have no idea what a bear market rally is or what has to happen after. My description is that bear market rallies always retrace their entire move, which happens at all degree levels.

Now that they think fundamantals have worsened and I’m sure they will switch to a bearish mood as this bearish phase progresses.  Fundamentals are lagging conditions to price and sometimes it could take years for the fundamentals to catch-up to the price.  My parrell lines are based on the top two points and it gives us a rough idea when to expect another big counter rally.

Maybe at the “B” wave low we could see some short term support but in the end our CAD must completely retrace its entire bullish move, that started at the early 2016 lows.  Our Canadian dollar is not the only bear market rally, as I have many that I’m working on.

Our September high was in Intermediate degree, so once this all finishes all my CAD wave counts will jump up by a minimum of one degree. Most of the time it will be a two-degree change. This can still be a few years away so don’t get any ideas that we are going to blast off in some 5 wave bull market in Primary degree.

Any Primary degree 5 wave sequence will not happen until after any Cycle degree 4th wave bottom has been hit! The trade wars may sound real but a lot of damage can be caused by some imaginary dragon just the same.

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Canadian Dollar Daily Chart Update: Crashing Along With Crude Oil prices.

Our Canadian Dollar is still crashing right along with crude oil prices as Canada has a real getting products to the market place. Short term I see no bright side  for our CAD to suddenly bottom and then turn into a great bull market. This is not going to happen as the CAD bull market fits best as an inverted zigzag, which are usally big bear market rallies.

From a Cycle degree perspective and calling it a bear market rally, you can always expect a complete retracement of the entire bullish phase. 4th wave rallies are all bear market rallies, and the higher degree the bigger the bear market rally will become. If an Intermedete degree bear market rally can fool the experts into believing a big bull market is in effect, then there is little hope for “Average Joe Trader” to know the difference as well.

Commercials are a bit net long already but those numbers can still get pushed to the extreme side, so at this time COT numbers have little meaning.  At .7618 our CAD may find some more price support, but that also has little meaning once this price level gets retraced.

In the monthly charts our CAD had two major peaks, one in 2007 and another lower high in 2011. The first peak matches up with the 2008 Oil peak, and the secondary CAD peak syncronizes well with the gold price peak.  You can’t get a better commodaties correlated currency, so our CAD is very important to follow if we want to be prepared for any Gold/ Oil bull market to come.  For gold to soar we need the CAD to soar as well, and at this time this looks highly unlikley. Despite what you may hear on the news Canada has some serious issues, all created by our own federal governmant. Carbon Tax, Massive minimum wage increases, all stiffle Canadian business.  Not until our smiling photo bomb expert wakes up to the problems he has created, it can’t get fixed.  Before too long Canada will be in a recession as more business start to move south. In BC our provincial government is controlled by the green party which wants no part of any oil pipeline projects.  It’s pretty sad to see a trade war errupt between two provinces, as we all lose when this happens.

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Canadian Dollar Daily Chart Update

Despite what you may be reading about Canada its fundamental economy is becoming a train wreck. Our commodities are turning into a bottle neck as the train tracks need major work and of course the pipeline issue with our local premier who is controlled by the “greens” is willing to go to jail to block any pipeline from being built.  We are facing the Carbon Tax which just scares away any big investors as costs increase. With the world in a lopsided oil trade, I can’t see our CAD soaring like many believe it will once the oil decline becomes more obvious.

The current commercial positions are long, but not by a wide margin. Since the decline is a 5th wave the diagonals come out of hiding, making our wave counting more challenging.  I love the challenge as they are part of the wave structure and provide us with a very important location clue.

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Canadian Dollar Daily Chart Update: Another 4th Wave Top!

I have posted a few charts using weekly and monthly charts. This is a daily chart as the back end is not affected. I like my bearish wave count better, even though commercials have net long positions. The big crash turned into a decent 5 wave decline which created a pretty good pattern. Now we are in a 5th wave decline and 5th waves are guaranteed to dish up surprises.

Yes, I would need 5 waves down in Minor degree, but this decline is not going to be some easy impulse decline, but it has started out as another fricken  diagonal. Compared to others this diagonal decline has been pretty clean so hopefully that will continue at least until we get to the last 5th wave decline in Minor degree.  Even though my countdown has started, I still like to see the first levels of support get completely retraced. Since we should be heading down another wave three, we need another zigzag crash to take place.

Sooner or later that “B” wave bottom in Minor degree will get get completely retraced, so expect the mainstream media to focus on this support level when we get close.

My hunt for all things Cycle degree is making progress, as my list has about 16 Cycle degree wave 3s that I’m working.  I’m sure that there will be a few more, but It’s impossible for me to get them all. Some analysts cover just a few indices, but I’m looking at over 16 main asset classes already and I can’t give intraday reports on most of them.

This year is going to be interesting to say the least as huge trends are about to change.

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Canadian Dollar Daily Chart Update

Since last August, 2017 our Canadian dollar has gone wild, with swings up followed by dramatic declines. As soon as our dollar went higher than the previous little bump, the bearish scenario was trashed at least temporary.  This can work as an expanded triangle and it looks big compared to any wave 1-2 that I have.

From the “D” wave top to the “E” wave bottom we only have a 7-wave count which works as a zigzag very well.  Any triangle pattern that we may have must not break below my 4th wave position because if it does, then chances are good my diagonal scenario gets reused. Market action has not forced me to change the bigger degree positions, but this little rally is either going to blow past the top trend line, or it will fail.

I have high confidence with my 4th wave scenario, but some of  the smaller moves  sure test my patience. Many times the CAD has also turned around close to months end, so it could take until May before this rally gets resolved.

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Canadian Dollar Daily Chart Update

The largest degree and wave pattern I show at the top is an Intermediate degree 4th wave.  Since I show an inverted zigzag this would mean our Canadian dollar was in a big bear market rally and when that is identified correctly, we know that a complete retracement should happen. Since the December peak our dollar has only produced one big lower high, but has produced several smaller lower highs on the way down.

With a 4th wave top in Intermediate degree, we know that we should expect a 5 wave decline in Minor degree.  That’s in a perfect world, but a diagonal decline can also produce another declining zigzag. Another zigzag is my  least favorite option, so for now I will stick with a 5 wave decline in Minor degree.

There still could be some short term upside yet, but then our dollar should reverse and head south again. Back at the February 2017 price peak of, .81 cents could be the highest reading for all of 2018. The February peak could still take many years before it is retraced so we have to buckle up and ride this bearish roller coaster for a lot longer.

Once this rally reverses, then a new low should happen, but then we could be setting up for a wave 1 bottom in Minute degree.  A wave 1-2 in Minute degree is the second set of a 1-2 wave count and the third set of 1-2 waves will be in another set of 5 waves in Minuette degree. Each set must be one degree lower and by the time the time the third set arrives, they will turn invisible.  Being specific and then the markets do the opposite, we know that a review would be instantly called for.

The 4th wave top in Intermediate degree is painting us a picture that this wave count has advanced past a Cycle degree peak, which was back in late 2007 and it’s still not finished. The 2007 peak was a wave 3 in Cycle degree.  When joining the peaks and the  bottom we sure can produce a big wedge, at least in Primary degree. When the wedges are finishing then this is a very powerful setup for a potentially new bull market phase that can last another 5-8 years.

The explosion of the VIX is a prime example, how powerful wedges can be in forecasting huge moves in advance. Right now, I’am getting a small collection together, which have huge Primary or Cycle degree wedges in progress, with many of them still being 2-3 years away from completing. Identifying these big wedge formations early is the key, as it’s all about “seeing it coming” that’s important.

The “Wedge” and two parallel lines are my two trend line configurations that I use, but I try to keep that to a minimum as when they use trend lines too much, they lose their importance.

Even though the commercial traders have small net long positions, they can stay like that for a very long time. Is a 10 year bear market long enough for you, or do we need a 13 year bear market before our CAD turns super bullish again.

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Canadian Dollar Daily Chart Review

Our Canadian dollar executed a swan dive that now has come to a bottom and has started to rally. At the same time we have a pattern that sure looks like a triangle. If this is the case, then the CAD can still soar much higher until another new record bear rally happens. This is the bullish scenario that still may play out, but all that means little if our CAD starts to break to the downside again.

We may need to give the CAD a bit more time to see if higher lows also start to develop. Higher lows at the intraday scale would not really help because the wild swings can slice through any trend line. In this potential triangle the first zigzag is missing so the very top can still stand as my “C” wave top.

It is the August 2017,  3 wave rally that can belong to the diagonal bullish phase. Our present move can still wobble around until the end of the month, so anything can still happen in the short term.

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Canadian Dollar Futures Daily Chart Update



At this point our Canadian dollar is still sinking that some say is the end of the Candaina dollar bull market. Hate to break the bad news folks, but the Canadian dollar bull market ended about 10 years ago. What we are in is the impending end of our Canadian dollar bear market. This end is still a few years away as we still would have wave 4-5 in Minute degree  to work through. We know what a pain in the ass some of these last waves can be, as the markets will always throw something at us to keep us scratching our heads.

Commercials are net short and that situation would also have to shift to a point when commercials are net long again by a wide margin.

Right now our CAD could be getting close to being a single flat, so until we break the May 2017 lows, our CAD can still reverse. So far this would be the least likely scenario, but a another counter rally should happen by the end of next week.  There are many turning points following the month to month pattern, but that is not written in stone.

So far the rally peak in 2017 looks like an inverted zigzag did play out, which means 100% of the entire bullish move that started in 2016 should get retraced. The CAD is going down along with the solar cycle #24 which means that solar cycle #25  pulling the CAD down. Any  end to the big CAD bear market, could take until solar cycle #24 has ended.

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March, 8, 2018 Canadian Dollar Intraday Crash Update

Our downside breakout has happened, but there is still more to go. The September peak ended on a “C5” wave terminating a high quality zigzag in Minor degree.  If this Minor degree top is out by one degree higher, then this shows that the big decline came from a Cycle degree top.  With the Minor degree top, my bull market top in 2008 must be a Primary degree.

I suspect the CAD is going to create a wave 3 extension, which could make any 5th wave shorter. Commercials are net short, so there is no reason to expect the CAD to suddenly turn north in another huge bullish phase. The only support we may get will be temporary,  until the majority are freaking out about how bad our CAD has become. This may not happen until the CAD is well below the 68 cent price level.

These are futures charts and a stand alone asset class, which can be played in both directions. Up or down, long or short is all that matters!  This impending decline may still take a year or two, but after that our Canadian dollar could go into a huge bull market.

All this “Tariff War” hype can get serious, but markets have a tendency to ignore much of the hype or the hype is irrelevant. Canada is going into a recession and the CAD is imploding with it. I don’t think that the USA markets are going to keep soaring, if Canada is slipping into a recession.

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Canadian Dollar 1980-2018 Monthly Chart Review


On my last Canadian dollar daily futures chart update, I had the recent peak as a 4th wave top in Intermediate degree. I can spend the entire weekend reviewing it all, and I “always” do this manually with pen and paper. Once I get a hand drawn wave count looking decent then this wave count gets scanned into my computer. Most analysts would be completely lost if they had to double check for errors by hand!

I realized that the 4th wave in intermediate degree only worked for a higher degree, so with this version I dropped my Intermediate degree 4th wave, down to a Minor degree 4th wave top.  Any one single degree change like this always has a domino effect, and all wave positions must be redone to as far back as we have records for. That sounds too much like work, so the majority of expert wave analysts practice cosmetic wave counting. I practice what I call “structural” or sequential wave counting.

Being in a degree higher than we should be, makes all the wave counts far less sensitive, and causes us to miss complete bull markets.

Worse yet we may not see a bear market coming, when all contrarian indicators say a bear market is coming. This CAD bear market has been around for 10 years already, and our recent decline should start to confirm this in the next year or so.

I have mentioned that a triangle is pretty rare, but I think I do have a few of them. On the late 2007 peak, I have a wave “D” in Primary degree and an “E” wave in Primary degree, must follow. We can’t have 5 waves down in Intermediate degree, because it simply will not fit mathematically and sequentially.  The largest 5 wave sequence I can have anywhere “after” the “D” wave, is a Minor degree run.

Canada is going into recession and it sure is not going to go alone. Many have said that our CAD follows the oil price, so if this is true, then a crashing oil price must also resume.

The mass media has declared a “Trade War”.  I’m sure many countries in the world will retaliate until we’re all in a worldwide recession.

The mass is starting to clue in, as It’s not rocket science to know what is going to happen, when taxes or duties are increased   dramatically.  Just read what happened when the Smoot-Hawley Tariff Act was passed in June, 17, 1930! This is the worlds second trade war in a Fibonacci 89 years.

In Ontario they voted in a 20% minimum wage increase and look what happened there, as thousands are losing their jobs.

Our CAD has lots more downside left, until the commercials shift into new net long positions again. Unloading our Canadian dollar will become the new favorite pastime.

Our dollar is imploding down into the bottom of cycle #24, so when this completes we could get a massive Canadian dollar reversal that would last for many years.

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Canadian Dollar Daily Chart Crash Review: Downside Breakout?

With this daily chart I show a potential zigzag and a 4th wave top in Intermediate degree. (Red). Our CAD has been taking a real beating as our famous “selfie king” fiddles. Trudeau has been on a wild spending spree burying our country into debt. Justin Trudeau has been snubbed in China and India. If he  thinks he can survive a tariff war with president Trump, then he is going to get a big surprise. A recession is coming and it is starting in Ontario with the 20% pay raises, the Ontario government voted in. This produced massive amounts of layoffs in the service sector, as restaurants cut back on employees. Governments engineered the minimum wage increase so they should be blamed for any recession about to come our way.

Last weeks commercial traders positions were still net short by a ratio of about 1.82:1. This isn’t too far out of wack and may even shrink if our Canadian dollar keeps imploding.  Right now the CAD is sitting just a bit above 77 cents, and I’m sure that will not hold. If all this is showing an Intermediate degree 4th wave top, then we should get 5 waves down in Minor degree. Our CAD would have to retrace the 72 cent price level and then even get close to the 68 cent price level.  The 68 cent price was hit in early 2002 after which it soared to the 2007 peak, before it crashed again.

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Canadian Dollar Daily Chart Review

The commercial traders are net short our Canadian Dollar which sure doesn’t motivate me to look for bullish wave counts.  Commercial traders were net long back at the May 2017 bottom, after which the CAD roared with a blistering bullish move. All good things must come to an end and our CAD has been taking a beating in the last little while.

The rally in early 2018 has now turned into a bust. This move sure looks like an inverted zigzag or it  could also work as a flat.  Either way  an inverted corrective always calls for a complete retracement, unless we’re part of a diagonal move.

In this case the Canadian Dollar would have to fall below the,  .775 cent price level, and then completely retrace that, . 725 cent  price bottom, as well.   I’m sure anything can still go wrong, but as long as the commercial stay very bearish I can’t see a super bull market in our CAD anytime soon.

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Canadian Dollar 2011-2018 Review

Since 2011 our Canadian dollar peaked out and then proceeded to crash right along with gold. Then in early 2016 the CAD crashed to its lowest point and then proceeded to charge up in what can fit into a perfect inverted zigzag. I only see a 5-3-5 regardless how short the C% wave may be. Technically speaking an inverted zigzag is a bear market rally, and bear market rallies always retrace their entire bullish moves.

We also know that zigzags can lead into the first part of a bigger flat. A Minor degree zigzag could lead into the first part of an Intermediate degree flat. The commercial traders are net short the CAD by a bit less than a 2:1 ratio, while the speculators are net long by about a 2:1 ratio.  I would still be bullish on our CAD if the commercials were all shifted to a net long position, but they’re not.

Our present little CAD rally looks like a fake attempt, but we need more evidence to help confirm this. I’m looking for any decline to show us that another correction has completed, because that is the only way when our CAD can soar again.

It’s not that simple as a diagonal 5th wave can also contain another zigzag as it finishes the 5th wave decline.  Any potential flat correction cannot fall to new record lows and could send the CAD into a wild “C” wave bull market in Intermediate degree.

It may take several months for any corrective decline to get cleared up or confirmed, and then I would like to see the commercial traders become extremely net long towards our CAD as well.

At $.72  our CAD could run into some very strong support, so anything can still happen.

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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.

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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. 

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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.    

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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. 

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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. 

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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. 

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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. 

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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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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. 

 

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