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 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.

Continue reading “Canadian Dollar Futures Daily Chart Update”

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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 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 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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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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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. 

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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.   

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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. 

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