Transcript for Canadian Dollar Trade

I have some screenshots I cannot reproduce but I included them in some slides so you know exactly
what to look for. The Canadian Dollar is one of the markets which bottomed to the day and bounced off
the reversal. So we’re gonna see that. That’s what one looks for.

[Reversal System PP2 – p 9/9] Here is the yearly, we see the (yellow arrow). 2016 was a significant
turning point. We had a direction change and a panic cycle. We know this was an important year. We
knew that back in 2011.

The first thing you see is how I put the reversal on this chart. This is how I do my charts. The red ones,
in this case are yearly bullish. The yearly bearish are black and the green ones are elected reversals.
We’re gonna look at this chart every day when I flip from daily to yearly. Oh! the Canadian Dollar took
out 3 reversals…that’s pretty bad!

2011 we rallied up into reversals. We failed to take them out. We have a yearly cycle. We know gold’s
gonna peak, oil’s peaked. All that stuff has yearly cycles. Obviously Australia and Canada will go down
with it…these commodity producing nations. So fundamentally it was good.

So then, we know the year. Now we go down to the quarters. We take out the monthly quarterly
reversals. That confirms the trend.

What else do you have see here? 2015 was 5 year down on a closing basis. 5 is a bear market cycle.

2016 was 5 years down intraday. We have two bear cycles here. So that is another system that tells us
OK, we got arrays, we got reversals, we got panic, we have two trading cycles too on the yearly. The
yearly numbers are very, very far below so we come down to test them, right?

Now here we look at the Yearly Canadian Dollar. Let’s look at the Global Market Watch, another system
independently. What does it do? What’s it say? 2016 – “Possible Important Low”, look at that! The
Global Market Watch agrees with the rest of the system cycles. Before it was “Waterfall in Motion” for
3 years, turning down 4 years ago. You have another system saying, “Hey, there’s something important
happening”, right? The pattern relationship test says you should see an important low. So already 2
systems telling us let’s watch 2016.

[Reversal System PP3 – p 4/7] So we know 2016 has 12 months and 365 days. Is it gonna be January 1 or
January [December] 31st? When will we see a low? The first thing you look at now that you have the
year, which quarters in 2016 are the turning points? OK so it happens to be the first quarter in 2016 was
a major turning point. It was one of two in this case, there’s first quarter.

Now this bar for 2016 are low, I should have had arrays that go back two or three years - I didn’t. So
since this is done from 2016 forward, there are a lot of cycles that came in and there are much higher
bars in the back. This bar was a very high bar before this bar showed up. But I did not have the
reversals.
So what do we see now? Let’s go back a few years. 2011 was a high. We failed on a bunch of
quarterly’s. Look at all the red numbers up there. But, the second trading strategy is if you missed the
first one you say “I don’t want to do it”. What do we see on the charts? We had 2 major reversals.
93.50 and 92.15. This is a quarterly number. We broke the uptrend line, we took out the reversals. This
was your last chance to say “I’m leaving Canada, I’m going”, right?

Now we took out the quarterly we know what the cycles were doing on the yearly’s right? What else we
see on the charts? Look at this we have a 0.14 gap. What is the rule? You take out a reversal, you go
for the next. Well $0.14, that’s huge gap. We had these gaps on the Australian dollar about three 10
cent gaps. We took out two we still have one. I’ve never seen that in thirty years in a Western currency.
We had one on the yen that was a 100 yens that’s just huge.

So this was the perfect trade. That’s what you’re looking for. The yearly. You got the quarterly. You
took them out and you have a gap and you know we fill it. But what we don’t know is how fast. I think
it’s a year and a half to fill that gap,right?. Well guess what. As you approach to fill that gap that 78.
What happens? It bounces a bit. But time wasn’t due. We took it out. We kept going down. We took
out the next one and the next one. So you kick back and say OK, we’ve taken out reversals, all is good.

Let’s go look at the quarterly in 2016. Well the first quarter. So now we know 2016 the first quarter. I
got it. Is that good enough? No. Because we’re greedy, right? So, we want to know which month. So
we look at the close of the [Global] Market Watch once again and what’s it say in the first quarter 2016?
“Waterfall Low”. After it says “Waterfall in Motion”, it says “Waterfall Low”. Very important. The
cycles are due.

The Global Market Watch. Two systems come to the same conclusion. And this is why the Global
Market Watch was so important. You can scan hundreds of thousands of securities. You look for this.
You say OK, we had the waterfall and it says, “oh there’s a low”. And now you go on Socrates and get
the report and you check the timing of the reversals. Where are you? This is how you find good trades.
Right?

[Reversal System PP3 – p 5/7] So now that we’re greedy, we go to the monthy. Now we look at which
month in 2016 are our turning points? January was a major turning point and May was one. But we are
closing 2016 so we know we have to look at January.

What happens here is the same. Let’s go back a few years. We broke the uptrend line we tested
underneath, the kiss of death. We took out about 5 monthly bearish reversals. So, on the monthly level
this was game over.

What happened? The market went straight through these 5 reversals. More than 1%. The 1% rule kicks
in. We rallied back. Actually we rallied back 5 months. We had a countertrend rally of 5 months. So
you could bite your fingers…are we gonna turn around? No, we’re not gonna turnaround, right. We
took out the yearly, quarterly reversals and the monthly’s. We tested and we didn’t even have the
power to come all the way up to the 95 level, but we did take a test, we turned down.
What else are we seeing here? A 14.5 cent gap on the monthly. We have the gap on the quarterly, now
we have the gap on the monthly’s. Man, we know we’re gonna go down there, right by our rules? What
happened it did get down, bounced off it a bit, then kept on taking a whole bunch of monthly’s right into
our turning point in January. We’ve been below two monthly’s but the market rallied very strongly out
of that and failed to take them last two out. This is a good indication that OK this is going to be a good
low. The market did not want to take out the last set.

[Reversal System PP3 – p 6/7] Now we go on the weekly. So we know the year, we know the quarter
and we know the month. Now OK let’s look in January. Which weeks in January are our high bars and
our turning points? Well it just happened to be the week of January 22nd. I didn’t screenshot the weekly
so I don’t have it but that was it. What happened, we came down into that week, we were slightly
below two reversals and we rallied strongly up. The market did not want to take out these reversals.

[Reversal System PP3 – p 7/7] And then we look at the week. We know which days in that week. There
are a couple of days. I think one was January 20th, a Wednesday I think. Look at this January 20th and 5
days. The market went below the daily but strongly rallied out of it, and didn’t take it out. So here we
looked from the yearly to the daily, we precisely got the low to the day. Rallying strongly out from the
daily, the weekly and the monthly. This gave us a good indication that this was the low, right?

[Reversal System PP3 – p 4/7] Now the important part was on the quarterly chart, we bounced exactly
between 6 ticks I believe off the quarterly number and strongly rallied up on the quarter, on the month,
on the week. That told us this was a good low. All the time was up to the daily. We bounced at least a
long term reversal without taking it out. This was the time you could have gone long, you put a stop
below it, for $500 or $200. Maybe you get stopped out. That’s the risk you take. But you didn’t, right?

So we got the cycles too, we got the Global Market Watch telling us, “Temporary Low”. You know the 1%
rule. You have to go back up to the yearly, right? That’s 80. Well, isn’t that precisely what the market
did when you look at it there?

[Reversal System PP3 – p 5/7] OK so here we got the monthly back from the January turning point. The
next one was May. Look as we approached May, we strongly rallied into May. A 12 cent rally, that is
significant for 5 months. And then came May, even the Global Market Watch was saying, “Temporary
High”. We failed to take out the reversal on the 80. We never did…so…we conclude the 1% rule. So the
idea was instead of the major low I was looking for in 2016, it became obvious it was only a reaction.

So in 2016 the arrays were filled, but it still needs to do time. But instead of a major low we had a
reaction, so OK. Like what I showed on the Canadian Dollar in the last chart, it’s just a reaction. It failed
to take out any numbers and we turn down again. And we are down significantly already, 74 now.

So this is what you look for. In this chart, we have everything in. We have cyclical highs, we have Global
Market Watch telling us. We have this uptrend line here. We closed below. We came and tested from
below, the kiss of death from technical. We have a huge gap, right?
Now if you just moved out of Canada at that time, 2011 or even when we took out the 92, 95 you would
have gone crazy if you owned the English punt. You’re gonna trade options, you could have got caught
in this 5 month reaction going up and testing the reversal. So it’s important to have a lot of time.

This was a very long 5 month reaction, but it did not change anything. So this is what you look for in
trades and you don’t find them every day. Look for gaps. Look for double reversals. And look for taking
out these reversals. And then you can trade whatever you want. If you trade options you can trade
options. If you want to change your life