Palladium and Nasdaq, Unhappy Together

My bearishness is intensifying.

Bonus: another sign that platinum's time is coming.

This chart from Slope.

From Stockcharts, the line from the 1980 high hits 2000 and the recent high:

Related posts:

Palladium Signals Top at $3200

The Top is Coming

Palladium Still Calling Tech & Palladium Top

Is The Bull Market Over?

2020 pre-covid panic: Palladium's Pendulum: A Third Top in Time and Price?

How Low Could Platinum Go?

About 18 percent downside to around $730 if it replays the early 2000s move.

Divided By BTC

When a commodity such as gold is in a breakout in most or all currencies, it is said to be clearly in a bull market. Below are various assets divided by Bitcoin. They all looked based to varying degrees, ARKK aside.

Glad I Didn't Chase Platinum

Platinum $10,000

Platinum is the cheapest of the precious metals if it can return to its former ratio with gold. If gold hits $5,000 and platinum hits its old peak ratio, it will reach $10,000 per ounce. If you look at fundamentals, you'd pick palladium over platinum though: Palladium set to rally for years on shortages, top miner says

Prices of palladium and rhodium are poised to rally for years as a supply squeeze tightens for the metals that are key to curbing vehicle emissions, said the head of the world’s third-largest producer of platinum group metals

Platinum prices, for which South Africa is the world’s top supplier, are likely to remain subdued in the medium term until automakers switch from using more palladium in catalytic converters, he said.

The chart and some cycle events argue for platinum. First the chart.

The metals are correlated, but platinum and palldium have different phases of leadership. Palladium peaks in 2001, platinum in 2007, palladium in 2020 (with a brief overshoot in 2022). Palladium peaks in 2001 after oil falls below $10, the Nasdaq tech bubble pops, Russia defaults on its debt, conincident with a top in the U.S. dollar index. What has happened in the past two years? Oil fell below $10 per barrel, the Nasdaq tech bubble is popping, Russia defaults on its debt, the U.S. dollar index is not yet making, but is inevitably heading for an important top.

The platinum analog playing out now would be the 2001 low before the bull market entered its manic phase. Platinum bottomed two years earlier, rallied and then consoliated those gains. A proportional conslidation would take platinum down into to the $800 to $850 area.

The fundamental bullish case for platinum will emerge after it has already run. Watch the chart.

Platinum Ratios

Platinum versus oil, copper and wheat.

PlatinumX̄

If gold goes to $5000, platinum goes to $10,000. My prediction is platinum outperforms silver in this bull cycle.

Platinum

Resistance, now support from 2008 peak.

Precious Metals and Copper vs Money Supply

I have the charts in terms of both M2 and TOTLL (Total Loans and Leases at commercial banks). I have M2 divided by the commodity because it makes the ratio larger than 1. I have tossed in SPY and QQQ to show how they are opposite to commodities and nearing peaks in terms of money supply. The Nasdaq should fall approximately 80 percent versus M2, a return to the peak ratio of M2/QQQ points to $60 at current M2.

The best looking chart to me is copper vs TOTLL. Held the pattern.

I calculated the implied price of every commodity assuming it reverts to the ratio peak vs M2 or if there's a trendline, tags support (for M2 divded by commodity price). These are conservative targets because it does not assume any growth in M2 and assumes no pattern break. For trendlines, I went out to Dec 2026 (6 years), that's simply my default setting for charts. Not suggesting a timeframe. IF it gets there sooner on a trendline, the price would be higher.

Gold $2525

Silver $67

Palladium $4084

Platinum $4570

Copper $10.88

Caveat to all: ratios can be broken, as the palladium chart shows.

2020 Sucked, 2021 Is Gonna Blow

Assuming the U.S. Dollar Index has entered a bear market, green regulations spread and deepen, governments increase stimulus and an full exit from the pandemic occurs, 2021 could be the year inflation returns. It will hit precious metals and industrial commodities first.

The U.S. Dollar Index has likely entered a bear market. The prior two bear markets saw 7 to 8 near-consecutive quarterly declines (the rebounds were small bumps on the road lower). A reversal to 96 is a correction, above and we're probably discussing widespread financial panic. The last stop for a rebound is the 88.50 area. If a bear market, the DXY should be sub-80 by year-end. Fundamentally, all the conditions for a relative dollar rally against foreign fiat are still in place, but it's a question of whether those fundamentals have been overwhelmed by animal spirits. Coming into 2021, the indication is yes.

The major indexes enter the year with a potential bearish setup. One must consider them through the lens of technology-sector distortion. Tne Nasdaq 100 has no upside resistance haven broken free. The DJOA and R2K both look like they're running into resistance, as would be the S&P 500 if it didn't have such a large technology weight.

The precious metals all have bullish setups except for palladium. It looks like it could be headed for another test of the top, but even if not, returns will likely be higher in other metals.

If a bullish resolution in 2021, copper should exceed $4 by year-end, and possibly as soon as May or June. It has a long way to go before hitting support at $3.00, a move below $2.90 would raise the threat of this year being a false breakout.

If gold will run, BTC Bitcoin looks like it will extend its run versus gold.

Silver junior miners could be the first movers if 2021 is gonna blow.