More on Palladium

Back in February 2020 I wrote a few posts on palladium because it looked like it was running into a peak. Even without coronavirus, the market looked like it was peaking. Palladium and the broader stock market's refusal to drop as coronavirus was spreading was warning that maybe this risk was overblown or would be ignored. At times I wondered if there would be a final run higher first. Instead, the market would enter a meltdown phase.

February 25, 2020: Market Correction: Done or Ready to Run?

February 19, 2020: Palladium Clock Adds a Tick and a Tock

February 16, 2020: Palladium's Pendulum: A Third Top in Time and Price?

The difference between then and now is that palladium isn't running to a new high, it already peaked.

Here's another interesting corrleation with palladium, this time the palladium-gold ratio and the U.S. Dollar Index.

There's definitiely some disconnect in the short-term, but overall those charts are moving in the same long-term direction. All relationships can breakdown, but this chart reminds of the Milkshake Theory. If the U.S. Dollar Index rises strongly because emerging markets default on their dollar-denominated debt, the Federal Reserve will likely be doing QE7, interest rates will be low, tech stocks/U.S. market will be rising as a safe heaven from overseas chaos. Something to file away if what looks like a short-to-intermediate term rally in the U.S. dollar turns into a large bull move.