 Hi everyone, so I want to make a video on Dan's comments regarding I guess the vaccine rollout how it you know certain countries are lagging and the really the effect of lagging Vaccine rollout will potentially affect a an economy, right? so and in particular we were talking about the the dollar and the cat right so one of the things that we have to always I Guess keep in mind. Yeah, is who is the dog with the least fleas? Yeah, and So the vaccine rollout. Yeah, the vaccine rollout is The expectation of that is linked to GDP The reason why and GDP growth or GDP contraction and The reason why that is is because the vaccine is obviously I wouldn't say this be a cure for the coronavirus, but it will reduce the spread of the coronavirus and so if you're reducing the spread of the coronavirus that the thinking is is that The economy can get back on its feet people can get back to work people can interact, you know and then The more people are getting back to work and some sort of normality then GDP, you know should should grow That's pretty much it so that the sort of thinking behind it is the more You know your vaccineing and vaccinating people in your country Then you know should lead to higher growth if you're lagging behind then obviously The the virus still has a chance of spreading etc. So it should lead to potential Sorry GDP contraction All right, that's the thinking behind it. That's the that was the trade idea. So back in November, right? November of 2020, right when us Oxford acts AstraZeneca And I think what's the other one again? I can't remember the other vaccine now. It's gone from my head But basically when the vaccines were really were really starting to Will kind of be in released and then the UK were, you know, kind of like ahead of the curve When it came to and they were ahead of everybody The idea was that because the market is always future thinking. Yeah, the market is always future thinking so the idea was that The UK being ahead of everyone, you know the expectation Yeah, it's kind of by the rumors of the fact but buying the rumor that the effect of The UK, you know managing to start their vaccine program first and get everyone vaccinated Pretty much before everyone else will be in the head of schedule would increase GDP because obviously as we know You know, they'd be back back to some sort of normality sooner, right now, of course, there are it's not it We really have to kind of not Take everything as gospel in a sense that there's no there's no certainties. Yeah, this is just a probabilistic nature Yeah, so if you hear something like that, don't just assume that that's exactly what it's going to be there's always going to be, you know hurdles and You know slips chips and fumbles with you know, the vaccine rollout there will potentially could be yeah So even though the UK was first doesn't mean that they were gonna be successful, right? But the idea of it is that you have to roll with is if they are successful then this should happen should Typically, you know, it's a probabilities game is likely to happen Right. Those are the the kind of that's the kind of mindset you need to think about now on the Obviously on the list we're looking at, you know, the vaccine rollout as an idea for GDP growth. Yeah, so When we were looking at the, you know, the UK and the pound This is the reason why the pound is, you know, going higher and higher and in price It's because of the expectation of GDP growth. Now, you've got, you know, for example, the US you've got Europe Yeah, the EU, you know, you've got Canada Sorry, CAD you've got Australia, etc. New Zealand Japan And so on and so forth, but the the the I guess the Focus really that that Dan was, you know, kind of Made me making the point of is is that he was looking at the divergence between the US and Canada So the dollar cat. Yeah, so I mean trading and looking at the dollar cat he was or he was obviously looking at the The the the the technicals and saying that well, you know, we've come down to a certain point and it looks like potentially we should want to, you know, go to, you know, the upside and the reason why is because Canadian dollar potentially is lagging the or is lagging the the US when it comes to the vaccine rollout now Yes, that is true. Yeah, but the question then becomes is that the best divergence because all what we're always looking for is the strongest divergences meaning you want to trade the strongest versus the weakest currencies because That is that is potentially where the bargains are that's where the trend is going to be because if something remains strong, yeah, and Something remains weak or continues to make and remain weak and struggle and depreciate, etc then All you want to do is just keep buying the the the appreciating currency Yeah, now there are levels of divergence, right? There are levels of over divergence And so what we want to do ultimately is we want to try to look for You know the Where where currencies are diametrically opposed. So let's take for example the dollar. Yeah versus the cat and and We want to outline all of the Divergences yeah divergences meaning where one is growing the other one is contracting or do we go in the other way? Right, so let's say for example, you know vaccine rollout in the vaccine rollout Yeah Yes, the US is ahead of the Canadian dollar But is the Canadian dollar really that bad? Yes, they are lagging But is it enough to you know To actually say yeah, well, you know, it's it's affecting their GDP, right for me It's not the reason why is because if you actually look at GDP. Yeah GDP numbers, you know quarter on quarter then in fact, I think the the dollar is I think that 4.3 was the final figure and The Canadian dollar was something like you know to think about 2.6 or something like that. Yeah So yes, even the dollar is ahead of Canada But it's but they're still growing right compared to where they were in the in the third quarter Yeah, this is fourth quarter data Yeah, Q4 For Q in the backwards, but you know, they're they're both growing from where they were from their previous negative GDP so they won't they they're growing still Yeah, and then you've got things like inflation interest rates and what you're doing is just comparing the The data right so can you see really a lot of divergence? Okay, other than the lag in the in the rollout and it's a lag doesn't mean it's going in the opposite direction They just maybe just a little bit behind is that you know enough to say alright Then the dollar is well, you know undervalued at this point And we should have a trend in the medium to long term medium to long term meaning, you know Maybe, you know three to six months six six months to 12 months kind of time time horizon because that's where that's where We want to kind of look towards we want to look towards those type of time horizons Yes, we look at short term one to three months as well, but even in the one to three month period is that enough for You know the the dollar CAD to really start to move up, you know Certain amount of pips right and your hundreds hundreds of pips now of course it could of course it might not right But it's it's harder to tell it's it for me It's harder to tell especially when you bring in or when you bring in for example Europe. Yeah so Europe and so Europe on the other hand When it comes to the vaccine rollout, they are struggling They are definitely behind everybody and they are struggling with the vaccine rollout In fact, you've got you've got Germany going into lockdowns and certain parts of Europe going back into lockdown Canada isn't going into any kind of lockdown But certain part of countries in Europe are going into lockdown so that is actually Negative, yeah, and then you've got GBP, which is I think it's like negative zero point Seven or something like that some somewhere in that region, right? So you've got in fact, you know talks of a double dip the session in Europe, etc, etc Right, so and the same thing, you know with inflation. They're lagging behind when it comes to inflation interest rates, right? It just so it's I think the US is still at zero point is it to five I think Canada is still super zero point two five as well percent And Europe I think are zero percent. So again When you're looking at the divergences going back to divergences when you're trying to pick pairs Yeah, and trying to discover pairs. It's not to me I can't look at a chart and say whether that's a bargain or not. It doesn't You can't tell whether something is a bargain or not On a price chart just because prices are trending down, for example, yeah For me it could trend down even even longer because fundamentals and the sentiment is what drives price Yeah, you're just seeing the result of price after Understanding the fundamentals and the risk sentiment. Yeah, this is not You know when people say, you know price action is king It really isn't because price is constantly being manipulated Especially on the shorter term, but on the longer term, you can't really manipulate price right for too long You know prices are being manipulated for liquidity for there to be you know more buying and selling and to draw Traders to taking the opposite position to you know the financial institutions, right? That's where why we have you know stop hunting liquidity hunting, etc But in the long term the banks know exactly where they want to be but they may have to manipulate a short term Yeah in the lower time frames and all the day traders in the five minute, you know 10 minute half an hour traders who trade typical technical analysis It's manipulating the prices down there But overall it's the reason why we consistently pick the long-term trends Yeah, because we understand where the market is going to go not all the time of course not 100% because it's not it's not It's never clear 100% but when it is clear you have a high probability You know of you know the market moving in that direction. Yeah And again the markets not always going to be clear, right? It's not always going to be this is you know This isn't this is that and when the market isn't clear then just don't take that trade but going back to Divergences yeah and the divergence when you compare the dollar, right? So you want to be a buyer of the dollar for now, right? Just for now because obviously data can change now when you compare buying the dollar against What the Canadian dollar or or the euro you have to look at the bigger divergence Which is the bigger divergence and for me the bigger divergence is obviously Europe Yeah Rather than Canada because even though again, they've got us they're lagging on the rollout They're not even close to being you know going back into lockdown, etc. They're not lagging behind on the economic data reaver so When picking the best pairs or the pairs the easy trades are like to call them There's lots of easy trades out to see lots of easy trades But there's easier trades out there and what we're looking for is the divergence the easy trades Yeah, the Canadian dollar although price may do what you want it to do in the short term It may not and the probability of it You know doing it is decreased if you if there are too strong or too weak currencies Yeah, you're too strong week to week currencies. It's difficult to tell so In an allergy of that if you're into any kind of sports. Yeah, would you rather take a bet? Yeah, if you had if you had it if you if you were betting on a football game for example You know the America they call it soccer right or any kind of sports game And you knew that you could you know had the same odds the same exact odds. Yeah for betting putting money and betting on The best team versus the worst team or two or the top two teams or the top Or the bottom two teams which one would you put your money on you'd put your money on you know the on the match where Or the game where you've got your putting your money on the best team Yeah, versus maybe the worst team, which is maybe number 10. Yeah, because you instinctively understand that the odds are in your favor Yeah Whereas why would you why would you you know put money on you know a team or a match or a game Where you've got the top two teams and you're trying to figure out who's going to win out of the top two teams It makes no sense Why do that when you can just basically put your money on this, you know The top team versus the bottom team and get the same odds get the same odds in fact You're pretty getting better odds, right because you understand the probabilities of what should happen. Yeah So that's the way that I look at it. Yeah, is that you can't just look at this in Look at something technically and then think okay, that's where am I going to find the trade or look for the trade Fundamentally and try to justify why you should be buying after you've looked at the technicals You should do the fundamentals first and this is just my approach anyway, of course, we can always arrive at the same Destination but the point is is that if you do the fundamentals first Yeah, then for me you can filter out the technical noise You can just go straight to the charts that you want to go to after doing the fundamentals and then those are your traits Yeah, which is the reason why on a you know on a on a on a Saturday, you know when we have our fundamental analysis calls You know we go through the pairs that we want to trade here So we do the tabs right and we go through it we mark out the tabs go through the fundamental analysis spreadsheet You know click the direction with a trade with your buyers green seller and then that's it We don't focus on any of these other pairs Fundamentally because either they're strong versus weak currencies or we're just unsure Fundamentally where the long-term medium to long-term direction, you know is going right so that's the way You know that that to approach it so The vaccine rollout idea is Starting to now come to I think a bit of an end It may have obviously some legs for some trades obviously with the euro dollar, etc But at some point the euro are gonna get their act together aren't they yeah They're gonna get the vaccine rollout won't be so much of a divergence anymore. Yeah, so Yes, there is lag the UK and the US is Leading Europe, which is the reason why you're seeing You know Euro pound for example go to the downside, which is basically, you know pound strength You're seeing euro dollar go to the downside, which is dollar strength You're seeing euro CAD go to the downside, which is CAD strength. Do you know what I mean? It's it's it's all driven by Fundamental analysis and risk sentiment and understanding where the easy trades are where the strong currencies are and where the weak currencies are and Once Europe does, you know figure out, you know and get its rollout going and they start to grow again Then that divergence is gonna become less and less. Yeah, so as a trade idea It's not something, you know, it may be for the foreseeable future Maybe for the next I don't know. I don't want to put a time frame on it, you know, one two three months but there's gonna come a time where Every country now is gonna start to grow and then that trade idea would have been done Now we've been trading this trade idea since November, right and capitalizing from it. So At some point trade ideas do come to an end. Yeah Some trade ideas last for years, for example, some trade ideas last for a couple of months Some trade ideas can last for, you know, a couple of quarters, you know, three six nine months, etc. Who knows but Going back to just understanding and wrapping this video up just understanding Divergencies and understanding where and what countries are potentially strong What countries are potentially weak is where you should be focused on because that is where those are where the trends You can identify the trends but great Discussion and really Good questions Dan and yeah mark. I totally agree. Just, you know strong obvious strong versus weak currencies, etc Yeah, and yeah Great, it's really good that you're that you're, you know, thinking about these things and being interested in it Because you have to have an interest if you're not interested in the fundamentals I say this people all the time if you're not interested in fundamental mis sentiment analysis, you just won't get it Just be really kind of boring to you But if you're, you know interested in this stuff and really trying to figure out how you know, it works Then you will start to see things will start to make sense, you know slowly It's not something that you can, you know, you'll just grasp straight away because there are a lot of moving parts But there are general rules to You know fundamental analysis and understanding really just where money will typically flow into Depending on the environment whether we're in a risk-on environment or whether we're in a risk-off environment Yeah, but um, but yeah, it's going to make that video for you and And yeah, well done keep up the great work and hopefully I see you guys in tomorrow's Group call it's going to be a good one. I think in Thursday as well So we'll be really kind of go over entries and understanding and really some risk management So guys take care and I'll speak to you all soon