Palladium Daily Chart, Potential Bull Trap Review.

 

PAY00-Sept-4-2016

 

I had more luck with calling turns in palladium than many other wave counts that I have created. This only improved after I gave up on my location of Cycle degree wave 3.  Cycle degree wave 3 is in the future, not stuck back in the 70’s, where it was for a long time. The wave count I’m showing you is one move, that has not completed, which will consist of 5 waves in Minuette degree. Getting a better wave count in palladium can change the gold outlook dramatically as well, so there is more to it than simply giving readers a mindless wave count made with a bunch of “WXY” waves.  I would have little problem in filling the palladium chart with “WXYXZ” waves, but it sure would confuse everything in the long run. The wave patterns I’m after, are the ones that will wipe out all those participants going in the very same direction.  

My Primary degree wave 3-4 has been shoved back to the 70’s, and the wave count above is part of a Minute degree “C” wave crash. Many contrarians think that the bear market was over in early 2016, as it sure was a good bear trap at that time. I changed my degree and adjusted some locations a bit better, and still, this 2016 bull market, looks like a giant bull trap. 

If we do a simple wave count starting in 2016, we have a count of 7 waves of similar physical size, and 5 smaller wave sizes as well. This could give us a wave count of 11 waves. 7 or 11 waves all mean the same thing, which is the pattern of a bear market rally. If this was just a bearish rally (fake bull market) then palladium has no choice but to crash, and it would eventually hit new record lows for 2016. It could take us another 3-5 months for this to fully play out. The question arises, “Will gold, silver, and oil keep soaring north as palladium implodes?”  I doubt it, but we need a bit more evidence to help confirm this.

It would be a waste of time trying to give you a price support level, as that would imply that we are still in a bull market. The only support we would see, will be temporary, until the bears are dominating the markets again.  So far the 5 waves are fitting a 5 wave impulse very well.  We can still run into a zigzag, or another diagonal 5th wave decline. The $540-$520 price level could give us a temporary “A” wave support, but that should also get breached if the new trend is down. 

There is one crash that I have to talk about as it is the key, if palladium will ever go higher again. I’m sure it will but this may not happen until palladium falls below $450 or lower. This one big crash happened from the January 2001 peak of $1090 down to the 2003 bottom low of $145. This was a $945 crash, but which contained a single zigzag. This is part of a correction, and eventually that entire crash will get completely retraced.

This would mean that from the next record low of $450 or so, palladium would soar to well over $1090 again. This is the power of forecasting with the EWP, but it  will never work if we have no clue about where we really are.  I never had the confidence to say this about any corrective crash, but after 2013 my confidence in giving bear market retracement numbers increased.  Bear markets are just corrections in a bigger bull market or the finishing, of an older bull market.

Calling an end to a bull market early, will not sit well with many contrarians, but it should not take all that long to confirm.  When do we give up on the bull run, when it retraces, 20, 40, 50, 60, 80, or 110%?  

As it stands and if I’m completely wrong, then this pattern would have to dramatically extend as another complete set of 5 waves would have to materialize soon. Only time will help to clarify this situation.