Big Rejection at 1.45 again on the USD/CAD at multi-year highs. Might have been the final blow off top on the USD buy the rumour sell the news type deal when Trump finally got in. Tough to know what to do here as a Canadian investor cause you have to assume that rates will normalize back to somewhere in thje mid to low 1.3 range at some point like they have for the entire history, so anything we sit on in USD now is subject to a ten percent loss when you pull it back. Thinking about converting every USD I have back into Canadian but then where do I go with it? This is a brutal situation right now.
I think we were all waiting to see what was announced today regarding tariffs. And it seems like nothing yet. My guess is that Trump is just throwing out wild ideas in order to help negotiate a better deal. He so threw out a low ball offer (ie. crazy tariffs), which scared everyone, and now they are likely to negotiate a much better deal since they fear him not backing down. But I think that since I've learned that Canada supplies a lot of oil and electricity to the US, Canada has leverage. So you may very well be right that over the coming months, CAD gains 10%. This strong US dollar is actually bad for the US, and Trump himself I think says he wants weaker dollar, so absent a trade and tariff war, you're probably absolutely right.
Yeah I agree that hes more than likely not going to do much with the tariffs, he just knows he has us bent over if he does, and he is using it to get what he wants in terms of both the border, and trade agreements.
No trades yet today, Trump signed hundreds of executive orders yesterday so want to see how it all plays out. Chart below of Canadian oil(XEG) vs u.s. oil (XOP) vs WTI Watching to see if the price of Oil will actually hold up now over 75 the next couple weeks. Chart from: HFI Research
Here is where I am sitting right now in terms of Oil and Gas plays, going to probably dump NXT today because im trying to get to 250k U.S. to hit the conversion breakpoint at BMO, After sitting on mostly USD the last few years trying to get that number back down to a third. Will still be about 500k USD exposure vs about a Million CAD. For the rest of the oil stuff looking for good canadian oil companies like WCP that pay a good dividend (7% plus) where I would be willing to average down big time as long as the dividend is safe. Basically hoping that the Canadian names do get hit and then will start looking for value there. Two Main U.S. plays for me right now are WES and PR, WES pays a 9% dividend so something I am comfortable averaging into if the shit hits the fan on oil and I got to sit on it for a while, while PR gives me the exposure I want to energy if there is a big upside move, the rest will either size in or cut as the story keeps becoming clearer.
Does anyone here know how it works in terms of margin for overnight FX positions like if I was to just short 300k USD against the CAD at IB would I have to pay the full margin price on the USD that im short or and then get whatever they pay me back in Canadian cash? So Id be would i be paying the 5.497% U.S. Margin rate and then Receiving the 2.646% Cash rate in Canadian If I was just to take the position with no cash in the account? (-2.851% per year) I would rather just keep the USD cash in BMO, and take a position short the USD as a hedge so i have the ability to buy U.S. stocks still, you can't convert every time you take a position at BMO because they rip you off they charge like 1% every time you do a conversion if you don't do it on bigger amounts.
looking at 22000 on the NQ or 530-532 area where there could potentially be some consolidation then see if it wants to roll over there, could just explode straight through though so being patient with it.
Only 2 trades today was on the phone this morning with IB when MOBX offer hit so just layered out some buy orders, was looking at the 1.75 area on the daily as resistance, thinking if I had to I would add at 2 with a stop over 2.2 but it never got to the second 2. When it popped in the morning and I got filled i just started layering out orders to buy because I didnt want to hang up the phone after sitting on hold for a half an hour in the morning. Other than that I sold NXT, and Sold 200k USD against the Canadian to hedge the currency exposure. For those wondering, you pay about 5.5 on the U.S. side and get 2.65 on the Canadian side, but I am also getting a point and as half more on the USD Cash at BMO so the cost of carry to just short the USD against the CAD here is about a point and a half rather than selling stock and converting. I have been trying to figure out this oil position and the currency and all the long term stuff so havent really been day trading much just being passive but once everything is inline there and its just a matter of holding I will get more active.
2 trades so far one KOPN was late waking up this morning, missed the good set up on it at 2.20 when it bounced the highs a second time, told myself if it gets under 2 it could potentially go to 1.50 cause it was up on garbage news from yesterday, so shorted at first at 198, took a quarter off at the bottom at 1.80 the first time to make the trade pay for itself if it got back over 2, then I started to really size in when it was rolling over at 1.95 cause I had a free trade at if it got over 2 and i had to stop out, then when it holds up over 1.85 between 6:15 and 6:45 it looked like a higher low so i just cut it and made a couple hundred bucks. Of course right after doing that fucking thing rolls back over down to 1.85, now it will probably fade all day. If I had a better initial entry, around 2.10 and it wasnt so much of a chase I would have held it all day cause it seems like one of those trades where the volume dries up and it just turns into an all day fade on day 2 of the move. Its hard to trade these things once the volume and volatility starts to fizzle like that, cause then the bots start working it around into stops.
Other than that shorted some NQ's took half of it off already so its a free trade, stopout if it breaks the highs of that consolidation, not going to chase it down or fuck around shorting it if it starts setting new highs. Otherwise hoping for another hundred points on my first exit and then will layer out of it. Mad at myself that I missed the blow off top on it yestyerday at lol