August 22, 2024

The Canadian Dollar IS moving…

dead on new 5-6 month highs,

and, I think, about to get explosive

I often get the understandable comment, in reference to some of my recommendations, that, “I don’t want to trade the ________. I don’t know anything about it.” But the dead honest truth is, “knowing” about any of the commodities we trade is irrelevant. To begin with, after 44 years in this business I “know” more about the various markets than 99% of traders, and I can promise you, that “knowledge” absolutely does NOT prevent me from sometimes being, for real, just DEAD, DEAD WRONG. The truth is, all that “knowing” does is maybe make you familiar with all the various metrics and “fundamentals” that talking heads yap about, which then leads you to hold trading opinions that you feel comfortable and confident in…which I can tell you, does not even come CLOSE to meaning, axiomatically, that because you “understand the market,” you will be right…I mean, I am no genius, but neither am I am trading dummy, and I cannot count the number of times that I have had enormously strong, logical, and well thought out opinions about markets that I “know,” that were just WRONG ( or “early,” which are one and the same), and so I am pretty sure it’s no different for anyone who reads this newsletter.

In the end, all of the markets are just lines on a chart…and all of the markets swing up and down…and ALL of the markets DO, over time, QUITE OFTEN make formations, and price moves, that would, if unlabeled, look exactly like ten other markets…In other words, if you didn’t know what market you were actually looking at, you might find yourself saying, “I have seen that ‘look’ before, many times, but I don’t know what market this is.” And that being said, having “studied” over a million (for real) charts, I will point blank tell you that I could give you INNUMERABLE specific examples of more or less EXACTLY the same chart formation in EVERY commodity on the board. This is not suggest that every one of those charts had the same outcome…While that can often (or NOT), be the case, the point here IS: I KNOW that the same setups or conditions occur over and over and over in all the markets, and a major aspect of the trades I make are therefore based on my having seen those “exactly the same” situations so many times (countless really) that I DO have a sense for what might come next, and when, or how big, etc…REGARDLESS of what the name of that market might actually be. This is NOT to say, by any means, that I will always be right…but this sort of recognition DOES, I firmly believe, increase the odds that I will be right. And one more time, it REALLY does not matter what market it might be.

So this entire discussion is aimed at one trade I’m absolutely on right now…which is BUYING THE CANADIAN DOLLAR…because I know that not a single person reading this is going to think, “Oh yeah. I know all about it. Let’s go!” VERY much the contrary…BUT…This IS to me a classic, classic situation where I can definitively see that a TON of speculative money is TOTALLY on one side of this trade…SHORT…and more than that, I can fairly well deduce that this SHORT position, the largest in Canadian Dollar history…built up since April…is now probably on the books at a loss…And with an extensive knowledge of what usually happens when traders, whoever they may be, including myself, start LOSING MONEY…THE NEXT THING I EXPECT TO SEE IS THAT MASSIVE POSITION BEGIN TO BE LIQUIDATED…and plain and simple…THAT MEANS HEAVY, HEAVY BUYING…

 I have no idea of how fast or big the Canadian might move on the upside, but I’d easily suppose it could be, minimally, 400-500 points from here…which, even then, would still not put it anywhere close to being “high” for this market…But running 400-500 points from here (and I DO think it’s going beyond that) still gets into some pretty strong potential dollar gains. However, as always, if I am wrong, and it’s not going up, that would almost certainly mean you could lose every dollar you put on the table…

This first chart might be too busy, and a bit confusing, but if you slow yourself down, and get a good look at the bottom two sections, I’m pretty sure you’ll get why I am on this idea…But just to be clear, SOONER OR LATER I THINK THE SPEC FUNDS WILL JUST GET IT HANDED TO THEM…And that, per my calculations, they are already beginning to lose money on a VERY large position…and most likely are ALREADY in a run-for-the-exits (as BUYERS) mode.

And this chart, I believe, really tells the story…

What I’m trying to show you is that this big ass Short Position (and it’s not one guy…it’s a bunch of Wall Street SHEEP) is probably already LOSING...and those Funds ARE starting to sweat (I've been there)...And when you're LOADED...and LOSING...Selling more is not an option. YOU START RUNNING...in other words, BUYING...and believe me, you DON'T get out of a 6 month build up in just a few days...or weeks…which is why I think the Canadian can EASILY run up 400-500 points from here…and quickly so.

 Here's the big picture…

And here are options I like here…I’d also note there are options in October, November and December…all based on the December 2024 contract, and all offering different degrees of leverage and time…

 This is the smart way to go…

But considering that the market is dead on new 5-6 months highs, and yeah…with all those big positions losing money ALREADY, I pretty much think we are potentially in the HERE AND NOW LIFT OFF STAGE…And doing something, in addition, with the October options, and the leverage they provide, makes sense.

Writing this newsletter actually helps me crystalize what is in my head…And there are times that as my thoughts, perspective and expectations unfold on the screen, it does affect the way I feel about a particular trade…And in this case, I can tell you that as I am ending this piece…and as I look at this situation…and what I truly think could be coming…and what option prices look like? Let’s just say it definitely turns up the dial for what I want to be doing in my own account…One more time though, I might just be dead wrong, and following my lead could absolutely mean losing everything you invest, but I LOVE WHAT I SEE HERE.

Also to say that if this newsletter has been passed along to you, and you think my ideas make sense…or if it’s only that you find what write to be interesting reading, please DO contact me and I’ll put you on the list…This newsletter IS my sales tool, and obviously my hopes are that anyone who does read my stuff will be “inspired” to trade here…BUT they certainly don’t have to…I’ll also add that whether or not you DO take any of these trades, I am ALWAYS interested in feedback, and I assure you I am not sitting here in some white tower and unavailable to talk. I’m just an ordinary, aging old “dude” who does like people, does like talking, and does like to hear what other people think.

And finally, if you DO want to do something with this, my two cents is NOT to wait around…I think this set up does have immediately explosive potential.

Thanks,

Bill

770-425-7241

866-578-1001

All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.

The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Canadian Dollar