Good morning,
Intuition is something that we all possess as a gift. It is an overpowering feeling that overcomes an individual’s ability to predict an outcome of an event for the benefit or detriment of the situation at hand. It can be a powerful tool if one has the ability to harness the signs presented and act accordingly to benefit or prevent a disaster from occurring.
Such a feeling overcame me on a recent trip to Montreal. I was invited to attend a hockey game and on the Friday evening after dinner, a small group headed to the casino which had just opened its doors to the public. There was a chill in the air and as we all donated $100 to form the gambling corporation, I had to excuse myself to find the lavatory. As I headed from the roulette table from which my group was able to squeeze to get a spot, our CEO gambler representative secured a position to place a bet. As I walked away a Loonie, $1 Canadian was on the floor.
Of course, I couldn’t resist and picked it up, like I would a beer can or liquor bottle. All of a sudden I got this overwhelming feeling that I am going to get lucky? After, heading back to the table, I stand back from the crowd. Our CEO placed a bet on #6 but the person taking the bet placed it on #16 instead. The error was acknowledged but our Rep says, let it ride. Meanwhile, as I am standing from afar, the last winning number was #34. Suddenly, in my mind, I was thinking #1 as it bombards my thoughts. I remained silent and did not vocalize my intuition. The wheel is in motion, the ball is in play and the number that flashes from where I am standing is #1.
My eyes were bulging out of my eye sockets as I couldn’t believe what I have just seen. Keep in mind the signs were everywhere. The error from 6 to 16, if you cancel the 6’s, the #1 remains. Looking at the #34, 3-4= -1, keep in mind there are only 36 numbers on the table, plus other side bets. Oh well, as the CEO said, if you were so sure just give us all $800 and let’s go party!
Speaking of Intuition and relating it to markets, the decision process can be quite challenging. In these extraordinary times, volatility rages full steam ahead. The shift in pricing, especially for large ticket items can be costly. For example, a one-cent move against a $1 million position equates to a $10k loss. Mind you, visa versa, a positive move equates to a $10k gain. Yet, as I always preach and speak from experience, you never gain a profit until you realize one. Being of Calabrese decent, it is said people of our heritage have hard heads and are quite stubborn? I must be 100% certified because I have a hard time taking a profit always waiting for the mother-load of profit to appear and then watching the gains dwindle into Capital losses so that one day I can offset the massive gain which I only dream about.
Recently, the perfect storm has been brewing for USD and Euro Buyers against the Canadian Dollar. This is where intuition could be beneficial if we analyze the events surrounding this opportunity. Recently, the distraction of war used to shift the focus of people from real issues domestically has set the USD Index in motion. Inflation, the cost of fuel, food and supply chain issues are a reality for millions. Blaming someone else for wayward policies seems to be a cowardly response simply to deflect responsibility. The USD Index recently hit the 99.70 level and the strength of the USD has been unprecedented mainly based on fear-mongering and the notion that interest rates will need to continue to rise. As a result, the Euro and all world currencies tend to weaken when the USD strengthens.
In the case of the Canadian Dollar, the Loonie remains strong because of two scenarios as follows;
- There is a rumour that the Bank of Canada (BOC) could raise rates by 0.50% rather than the (0.25%) expected at the April 13th meeting. The BOC decision is also prior to the Federal Reserve.
- The Price of Oil continues to rise and maintains a footing above the $100/barrel level while the price of all commodities is hitting record highs.
Therefore, even with a strong USD which I believe is temporary, it provides an opportunity to buy USD cheaper as well as Euro against the Canadian Dollar. Keep in mind the Canadian Dollar traded below the 0.78 cent level less than 2 weeks ago and is now entrenched above the 0.80 level.
Therefore, as experience would dictate, once the announcement is made, there should be some unwinding of the momentum with profit-taking occurring. The other scenarios that could reverse the trend are if the move is less than the anticipated rumour or if they don’t do anything at all. Mind you the momentum could continue if they raise more than the anticipated expectations but the Federal Government in Canada will announce a spring budget soon as well. The printing of more money will definitely continue to push inflation higher and tax the people to death in Canada. Consequently, the cost to service the debt could be insurmountable due to introducing expenditures the country simply can’t afford. People that are already strapped with financial constraints could be challenged to keep the very homes they live in and become more dependent on the government for everything.
Precious Metals continue to remain strong despite the strength of the USD. It is a telling sign that the USD strength is a mirage. Inflation is real and the value of money is eroding quickly. Use your intuition and gut feelings to make decisions that make financial sense for the immediate situation as we do not know what the future brings except more uncertainty. Call me direct to discuss hedging strategies and secure those profits before they can become realized losses?
Pass it on as I am always available to provide the most advanced foreign exchange services and knowledge, efficiency, expertise and above all integrity. Referrals are welcomed and very much appreciated.
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