Canada this week 09/06

Hello traders!

This week we will have another two rates decisions; RBA already kept their the same this morning. For now, I want to concentrate on the BoC due to oil.

Here is what I see:

So they added 25 basis points in July on the numbers that were given to them; 1,3% CPI June and 1% CPI July; thus the big surprise. I didn’t expect it at all and the reaction proved that very few people expected the rate hike. The Canadian dollar appreciated more than 2 cents on that day against the greenback and continued it’s strength another 3,5 cents over the following 2 weeks.

So we all know oil is a good leading indicator for inflation and if you want proof, look no further. Here is the chart Canadian inflation compared to oil.

 

Here are my thoughts; If they are willing to increase rates at 1%, CPI why not 1,2%? Are they forecasting the price of oil perhaps? I should think that these guys know better what the prices of oil will do, they are exporting it! And the storm in Texas is not a factor?

In my opinion, here is the chain reaction of events most likely to happen : Hurricane Harvey can result in shortage of oil supply in the US.  Lower supply in the US will results in higher production by Canada which means CAD strength, economic growth, more employment resulting in higher inflation.  The higher prices anticipated in oil will also result in higher inflation which will lead to interest rates hikes.  It is a double whammy;  The Canadian Dollar will appreciate due to higher exports and inflation causing higher rates. The flip side is if they don’t hike rates now; as everyone is expecting and just a small movement will be seen now, but medium term CAD will appreciate with oil.

I think the rate hike is more likely than not. I believe the numbers tell us that they will increase rates and we can now prepare for it according to the fundamental analyses and take positions which make sense.

So here is a strategy you might use: Looking to short UsdCad with small rallies, which technically are corrections due to the massive bearish market on the chart, just in case we get that rate hike. In case no rates hike, the Canadian Dollar is likely to strengthen medium term in any case due to the supply shortages coming from Texas.

Pick your positions with care!

Happy Trading

Kobus

Why a mentor? Tips when choosing yours.

Why a mentor?

I also have mentors, many of them! I still learn from them and still respect them, I have chosen them because they are clearly leaders in the industry. They help me to stay on track and they motivate me when I need it most, helping me to excel in my skill. I also have learnt from them how to be a good mentor and what my responsibilities are to the ones I mentor.

Here is the definition of a mentor and how I chose mine. And after years being with them, I chose the right ones!

Mentor:

          noun.

  1. an experienced and trusted adviser.
    “he was her friend and mentor until his death”
    synonyms: adviserguideconfidant, confidante, counsellorconsultanttherapist;
    verb
  1. advise or train (someone, especially a younger colleague).
    “both trainees were expertly mentored by a site supervisor”

So it is clear:

Mentors should teach themselves, counsel and help students themselves! The reason for that is very simple: a mentor has knowledge and experience that you will not be able to find in any other book or on any other website! Small pieces of gold hidden to be discovered and only by the ones close to them. I can read all the books I want but experience is worth 10 times more and is learnt in a very short time. What the mentor learnt over years, he can translate to you in weeks and even days, it saves you time and pain and lots of frustration.

So here is my tips for choosing a mentor:

  1. Make sure the guy who sells you the course is the one who will train you and mentor you himself. You need to work closely with him to learn from him, dont settle for anyone else.
  2. Go look at their profiles, Facebook, Twitter, Instagram.
    1. Are they telling you how great their lives are or are they teaching, helping others?
    2. Pictures: All about themselves or about the market?
    3. Watches, cars and cash is a run away signal!
  3. Ask their students – easy to fool the public, go ask the ones who already did the course.
  4. Are they knowledgeable and yet still teachable? The market keeps traders humble; if this guy knows it all, get yourself another mentor.
  5. Ask to join a free mentorship session and see for yourself. See how he is handling his responsibilities to his current students. Is he getting someone else to do his job?
  6. Are they professional?
  7. Is your growth important to him? Is he pushing you to excel?

Mentors are a must! I will not be where I am today if it werent for my mentors from which I have learnt from. Years and years of hard work with them is paying off every single trade. Let your mentor push you! Do the “wax on, wax off” exercises, keep going, walk the road with him and come out a better person!

Happy trading!

Kobus Kemp