Aussies Love Sport has been backed in from $151 to $15 for the Magic Millions Classic and Waterhouse says he has the talent to be a player in major two-year-old races.
His performance on Saturday will decide if he gets a start in the Magic Millions.
"If he doesn't win on Saturday we won't worry about it," Waterhouse said.
"We'll concentrate on winning the Golden Slipper with him."
Aussies Love Sport will be ridden by Tommy Berry on Saturday.
The colt will face a solid test because the Canterbury race features the Chris Waller-trained Champagne Cath who was an impressive Rosehill winner on debut.
"I'd probably like it better if it was over 1000 or 1100m on Saturday but that's not to be," Waterhouse said.
Waller took Magic Millions hopeful Champagne Cath to Canterbury last Friday night for an exhibition gallop.
She is entered for a Brisbane race on Saturday but Waller said the filly would run at Canterbury.
"She'll go there on Saturday and we'll see how good she is," Waller said.
"She's racing against some new horses and she's got to put two together. If she doesn't she'll probably go to the paddock."
Yesterday, Waller opened the Rosehill Boxing Day meeting with yet another victory but the leading trainer would have loved to have seen more people watching Hawkspur continue a winning streak.
Hawkspur made it three wins on the trot with victory against a small field in the Australian Turf Club Handicap (1900m) in front of a disappointing crowd. "It's hard to begrudge Sydney racing but just bear a thought that Melbourne are racing for A$80,000 today and we're racing for A$42,000," Waller said.
"We've got to get people to the races. People had their big family day yesterday and want something to do. Create a bit of atmosphere and have a short, sharp programme to get people to the track. I've got a family, too, and I want them to come when there's an atmosphere."
Waller is looking to the Brisbane winter with Hawkspur.
He said lead-up races to the Queensland Derby would be likely targets. "He just keeps taking another step. He had a bit of weight today but he beat them fair and square."
-AAP