Tag Archives: Elliott Wave CAD

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 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 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 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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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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