Compared to platinum, palladium is in a different world or that’s how it seems. In the long run market trends never last and palladium is pushing higher where we are about 60 points away from new record highs. New record highs can produce new record lows as this palladium monthly chart clearly shows. The choppy pattern is pretty normal, but counting it out to figure where we are, is a different ball game. What do we call a bear market in palladium when all it seems we get big ugly crashes in palladium. I see it all as diagonal wave structures.
I think palladium is finishing wave 3 in Cycle degree and it may still have a bit to go before it dies! I see a rising wedge which is about as bearish of a signal that we can get. There are 2 big wedges, and at least one of them will give us a dramatic show in the next few years! Commercials are net short palladium as of last Friday, and when they slowly start to switch, then any bearish move will start to get tired and a reversal would be getting close. I know the book talks about “Truncation” in a 5th wave but what does that really mean? I see many “Truncated” wave structures all the time and I see them as very bullish in a bull market and very bearish in the start of a bear market. In this case, the “A” wave is very long but the “C” wave is still “Truncated” or shorter. Zigzags are rarely even as they can stretch so wild that they are hard to believe.
Truncation at a major bottom is a very bullish signal, and the reverse is true at major tops. The 2008 bottom is a prime example of a flat which can be called truncated, but I see them as running flats or even running zigzags. During the 1990’s silver had more “Truncated” waves than we can shake a stick at, and they were all extremely bullish signals. Even when we go back to the 1980 palladium crash, look how long that “C” wave was in a zigzag! If it happens once in history then I use it for any degree move as well.
So if a Cycle degree palladium crash is expected, then another zigzag would be my first logical guess. It would take little to crash this palladium chart and no amount of fundamental jargon will stop it from crashing.