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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.
It is entirely possible I’m doing this too soon, which is why I’m only entering half the position, but I have re-entered my long palladium position. The palladium futures themselves peaked fifteen trading days ago, and in my estimation, $1363 represents an important level of support for the metal. Should this be breached, I’ll take a loss on my long and be out of there like a shot.
As noted last week, I am hearing all too much talk about a market crash to feel comfortable in a bearish view beyond the very short-term. Yes, the national debt (along with debts around the globe) is increasing with no end in sight. YouTube’s algo keeps feeding my TV video interviews of deep market thinkers talking about the coming crash. CNN even talked crash with 1929 author Andrew Sorkin. Ooh, scary!
It was October, after all, the most overrated, supposedly bearish month of the year. Well, nothing is foolproof, least of all market seasonals, but we are now in November, the traditional beginning of the supposedly bullish period that ends with “go away in May.”
The October crash talk is a “tell” that a crash is probably not imminent. Here is another. While I take issue with minor elements of CNN’s interpretation of the Fear/Greed index, you just don’t tend to get market crashes from all-time highs with sentiment readings like this. Market crashes tend to occur after enough bearish activity has already happened to drive mass sentiment to fearful.
(more…)I am using every bit of my force of will to prevent me from buying palladium until it is at a good price. What’s my target? I’d say this gap closure I’m emphasized:
XME fracture its line last Wednesday. Today, that damage is expressing itself more fully.
