Attentive readers know all too well how obsessed I’ve been with ratio charts this year. The message has been unanimous and strong: bullish precious/bearish equities. I am particularly fixated on the lesser-known palladium, whose long-term value divided by the SPY yields a very bullish-looking base.
This pattern already succeeded wildly this year, but recently it has backed off hard to what I consider an important support level. I am thus finally back “all in” with palladium.
I would add that palladium’s long-term chart divided by the US Dollar Index also yields a very bullish setup. The prior two instances were followed by a multi-year bull market, and I’m hoping this time it’s no different.
Indeed, looking at just today, we can see how palladium how roared higher, zipping consistently higher over the past week.
In contrast, it seems that the tech-heavy equity market is starting to wheeze and gasp a bit.
My point being: I want to live in a world where precious goes up and equities go down, and I think we’re just about there. At the moment, palladium (by way of PALL) is challenging a minor resistance line. The real “victory” will be had if it can:
- get above the gap at $144
- get above the recent multi-year high at $148.89
Cross everything you’ve got two of!
