Loons are a species of bird that are an iconic part of the northern Ontario—and much of Canada’s northern wilderness experience. We live with the loons in my cottage throughout the summer in “the Near North” of Ontario. We watch them fly home, raise a family, and then fly back south before the winter. The Canadian dollar, nicknamed the loonie for its picture on the coin, looks to be flying south of late – along with its feathered brethren.
Like the loons, who tend to fly to the same areas every year, there are past support levels where our loonie might just choose to land if or as the current downtrend continues. My chart today illustrates major levels of support that could offer areas of consolidation for our dollar. Current support of around 0.89, as seen on the chart, will need to be held if the loonie hopes to avoid a bigger move down to 0.85.
Ours is a commodity driven economy. Thus, many have called the loonie a “petro-dollar”. Energy is not our only major commodity play, so that label may be a bit unfair. Whatever the case, I’d like to steer you back to a blog of a couple of weeks ago on commodities: https://www.valuetrend.ca/?p=3205
The trend for most of the major commodities, as you will see on the charts on that page, are bearish. Oil is consolidating in a triangle—a break below $90 might spell more trouble ahead. Especially if the rest of the gang, as noted on the blog mentioned, continue falling. Seasonality on metals and mining doesn’t improve until November, and Oil usually starts its best patterns later in the winter (Thackray’s Guide). My guess is that the loonie won’t hold current support levels. But best to watch for a break before acting on that hunch. Meanwhile, we at ValueTrend continue to focus on US based stocks in our equity platform – for both superior opportunities and as a currency diversification strategy.
Keith on BNN tomorrow night
I’m on BNN MarketCall Tonight –Tuesday September 30, 6:00pm. Phone in with your questions on technical analysis for me during the show. CALL TOLL-FREE 1-855-326-6266. Or email your questions ahead of time (specify they are for Keith) to [email protected]
GLOBAL I-SHARES IN THE WORLD (EEM, EWT, EWA,EWC, ECT.) ARE AT OR BELOW 200 DMA ( U.S. DRIVEN?). MORE IMPORTANT THEY CONTINUE TO MAKE LOWER LOWS AND LOWER HIGHS (DOWNTREND). THE DOW JONES GLOBAL INDEX IS PART OF THIS BIG PICTURE ($DJW) AND SITS AT 200DMA AND UNDER TRENDLINE.
IF THE S&P500 COMPONENTS ARE GLOBAL, SHOULD WE START TO SEE IT IN COMING EARNING REPORTS? DO WE HAVE A “DIVERGENCE” BETWEEN THIS GLOBAL GROUP AND THE U.S. MARKET SO CLOSE TO RECENT MARKET TOP? COULD THIS BE THE CATALYST THAT WILL BRING SPX INDEX TO THE 200DMA?
Good day, Keith . On bnn I don t think you mentioned bip.un. It is a favorite of yours and you usually say to buy at trendline. Has it broken trendline here? Would you buy here? Would you put a stop somewhere? Thanks.
I’m watching it as its in danger of taking out its current support of $42. If it holds, I’d buy. If it doesn’t, we may sell.
Thanks Keith, will watch 42 – this is the first time bip.un has me nevous!