Monday, March 22, 2010

The Stealth Palladium

I know lot of times I focus on Gold on this blog, but as Joe correctly mentioned from the beginning of this yr palladium has outperformed Gold and SWC which is one of the top palladium mining stocks in the world has done well. If you bought and held SWC at the bottom which was $2, you would have made 700% in your investment, even since January SWC has been a monster. Palladium is now at a very important junction; it has just broken through the long term down trend line and is attempting to break out of a 10 year channel formation. Palladium will now need to trade past the 465-475 ranges for 12 days in a row. If it can achieve this, it will set up the base for a rally that could take it all the way to the 800-890 ranges. If we had to put a time frame on this, we would say that once it trades past the 456-475 ranges for the suggested period of time, it could hit these targets within 12-18 months.
The real bull market, however, will only begin when palladium trades past 1100. Taking an even long term view; a close above 1100 on a monthly basis and the ability to trade past this level for 15 consecutive days in a row, should lead to a test of the 1500-1700 ranges.

The following article explains the status of palladium & it's potential, read the entire article:

Palladium was the underdog of the precious metals sector for a long time, because for the most part it hardly received any attention. In the last few months this all changed and with the introduction of the Palladium ETF (PALL), Palladium has finally emerged from the shadows to the spotlight. Now the average Joe has a way to jump in and out of Palladium without having to actually purchase the metal. In reality owing the physical is far better than buying the ETF, but that is a topic for another day. When the Gold ETF was introduced it helped drive the price of gold bullion because it provided an easy means to jump in and out of Gold and so investors piled into it; from nowhere in a few years GLD has grown into a juggernaut. GLD is now the 6th largest holder of gold bullion in the world. In the same manner demand for Palladium is going to rocket upwards with the introduction of the Palladium ETF (PALL). PALL hit the markets on the 8th of January and it has already had an impact on Palladium’s price. Note that Palladium is the only precious metal that has actually put in a new 52 week highs in the face of a stronger dollar . While demand dropped a bit in 2009 due to the economic crisis, this drop did not seem to prevent this metal from surging to a series of new 52 week highs. In fact, in the past 15 months, palladium is the best performing precious metal. China’s appetite for Palladium is growing at a voracious rate. A report by David Jollie published in May 2009 by Johnson Matthey states that demand in Chian surged from 500,000 oz to 650,000 ounces, in 2008. Demand from the Jewellery sector was rather strong in the first three quarters of the year. In 2008 there was a surplus of 460,000 ounces but net demand still climbed by 15,000 oz, to 6.85 million oz, although the world as a whole was going through one of the worst economic crises in the last 60 years. The palladium market was in surplus by 460,000 oz in 2008 and yet net palladium demand climbed by 15,000 oz, to 6.85-million ounces, despite the economic slowdown. Production, on the other hand continues to fall mainly owing to lower production by the two major players in this sector, Russian and South Africa. Production fell to 7.31 million ounces in 2008, a fall of almost 15%. Investment demand for Palladium climbed to 400,000 ounces in 2008, a rise of over 50%. ETF’s were the major players purchasing 370,000 ounces and demand via coins and small bars jumped to 30,000 ounces. As of Feb 2010, the Palladium ETF PALL has 430,000 ounces of Palladium. This is a huge amount of Palladium; to put this in perspective consider the fact that it took the London ETF over 2 years to accumulate the same amount. As stated below the demand for precious metals (Palladium, Platinum, Gold and Silver) is increasing at a voracious pace

http://news.goldseek.com/TacticalInvestor/1269290256.php

28 comments:

  1. "Palladium is the only precious metal that has actually put in a new 52 week highs in the face of a stronger dollar ."

    CORRECT!

    Joe

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  2. A couple thoughts and notes below from Analyze:

    You may recall several of the regulars here landed on the premise of SPX greater than 1090 means it goes to 1150. I believe there is a bigger call in play now, and the downside of today was intentional to make it happen: SPX greater than 1073 means it goes to 1250 as a verified call if that 1073 breakout happens.
    Our original consolidation range of 1070-1148 has led to the current one of 1148-1170, window dressing may break this range rather quickly and run it to that target. If there was a red open, I would look at 1162, 1152 as reversals for aggressive buys, and 1148 would be the danger zone for the bull story (hehe, BS story). If window dressing plays out, I would be an aggressive seller of some of the most bloated retail and small cap positions starting in April, and would run that parallel to playing long of whatever was being ponzied to float the market.

    I have spent several hours tonight looking through a ton of charts, so there are some chasing/continuation plays to follow, and some lagging entries that may catch up, especially on the window dressing premise.

    Chasing plays (one note, if these ramped plays run out of steam, holding them will be the equivalent of chasing a glass of urine, so play accordingly): M, RVBD, and the casinos such as LVS, MGM, BYD etc.

    Some other ones that ramped but the technicals are borderline for continuation are SNDK, IPI.
    It is possible for coal plays like ACI and PCX to play catch-up, but they are not my primary focus.

    I suspect tech stocks may be part of the window dressing ramp, here are a couple plays that are of interest, including notes on S, which Joe discovered and mentions regularly:

    AAPL – it is trapped in a 220.25 – 227.48 channel. Buy the bottom and sell the top if volume wanes at the resistance, also watch for the breakout. I like this for gaming the channel especially if volatility comes in to support channel extreme tests. It will ramp if it breaks the top.

    MTL – ran big today, but I would need a 27.46 breakout that was ripping to hit it long.

    MRVL – possible runner if it broke to the upside beyond 20.8. It is in a wedge, play that otherwise. Careful on the options side, this is the house of pain if you are on the wrong side of it, but great if you catch the upswings.

    IBM – this is one I noticed as a sleeping giant play tonight, it is a laggard, so similar to GE last week, if someone prods it awake it will rip. 125.6-129 range, scalp that or play the breakout if it occurs. I like the technical setup, I think that one can run here.

    RIMM – has a great technical setup with the gap fill at 82.72 as the target, and ponzi support where it hit its low today. Potential retraces on the way up are at 76.53 and 78. Has earnings on 3/31, which also makes it a perfect window dressing candidate with that date itself as a reason to run.

    GOOG – If China news changed it would rip up and BIDU would rip down, keep those on your radar. Even missing the initial move, there would be good plays even the day after on those.

    S – One of Joe’s favorites. It has been in a downtrend since May 2009, but exited its primary downtrend on 11/17, and has been putting in a broadening trend since in reversal attempts, with the main rejection line being the trend hitting the 5/20, 12/9, and 3/10 candles. It is close, if it breaks outside that, it could be an explosive reversal.

    So there you have it, do your own DD.

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  3. Edit, I meant 1173 breakout in the above to give the 1250 target. - Analyze.

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  4. Analyze,

    Good work especially your analysis on Sprint (S). The 1173 traget on S&P is also an important target to watch from technical perspective. As far as Gold, the support is around 1075 followed by 1050 and 1020, if those targets hold then 1300 can easily be achieved by yr end. Oil is still fluctuating between 79 & 83, that channel needs to break, strong support for oil is around 75 and resistance around 84/85.

    Joe

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  5. Analyze,

    From DOW perspective, 10300 is the strong support now, the resistance was around 10700 which is broken.

    Joe

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  6. By the way if S&P breaks 1173 and moves toward 1250, from mining perspective the base and industrial metals will perform better than gold miners, so keep that in mind as well.

    Joe

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  7. Joe, Great info on oil, miners, gold and metals. From these posts, it gives people several sectors to play and toggle around to on a given day to see what is ramping. Pretty tied up during the days so my posts may be scarce from time to time intraday. I think we will crush this going forward. - Analyze.

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  8. Analyze your screen name suits you well. Very thoughtful insights.

    Today will be my last day of trading until Friday. I will be heading back to the states tomorrow and I dont see any value in being too exposed in the ponzi while I am unable to trade.

    If I see a good entry in the miners I will be a buyer since they have been a safe hold.

    Kli thanks for the plug.

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  9. CNAM kaboom!

    http://finance.yahoo.com/news/China-Armco-Metals-Secures-iw-881592350.html?x=0

    Joe

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  10. Good call by CBS
    pull back and a nice bull flag on the 5 minute. re-entry if 9.11 holds

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  11. silver miners SSRI SLW strong.......nice gap

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  12. CBS......you brought CNAM......Joes killin it ....where are you in it now

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  13. Sprint moving nicely,heheee!

    Joe

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  14. once again the gaps worked well. dollar week and testing LOD

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  15. Temo,

    Get them bud, good gap trading= $$$$$$$$$

    Joe

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  16. I like this market better than last yr, buy and hold was too easy last yr, this yr is more challenging and also more rewarding, heheee!

    Joe

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  17. Red,

    The past 3 trading sessions CNAM = juicy alpo

    Joe

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  18. Hey guys, I'm stuck in EGO around 12.96...(. Like I have said I would rather be out of a trade, wishing I was in, than in a trade wishing I was out..;) If it continues next week I'll try and get some.

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  19. Nancy,

    Do you have any sprint ( S) ?

    Joe

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  20. Joe, CNAM is a commodity daytraders dream in a stagflation environment, low float, tracks index and commodities, but more important guaranteed Chinese government contracts thus liquidity.

    Squeeze the shorts , pump , dump, repeat.

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  21. Red,

    Correct, which is why I really like it.

    Joe

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  22. The majesty of fiat funny money.....bababoom....

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  23. Analyze,

    1173 on S&P broken today.

    Joe

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  24. Joe, great day with lots of our watchlist items from last night ripping it up, above broken resistance (notice S and its trendline...YES!), AAPL breakout, etc, or set to gap it in the morning. - Analyze.

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  25. Anyone one see TIE today...I was holding that a while back...should have hung on...:( TXB

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  26. TXB,

    what ever you do just make sure not to fall into herd mentality, this market has not gone up due to herd being bullish, think like big boys. If you trade based on BIAS or herd mentality not only GS will kill you, I will take it too. I will take any moron's money who is brainwashed especially those that are numb nuts.

    Joe

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  27. Joe, S up over 4% AH on announcement of 4G phone for the summer, I am sure it is coincidence it took that trendline out today prior to the announcement; - Analyze.

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  28. Analyze,

    you are one of my favorite posters, you pay attention to details and not biased. I noticed the action after hrs. The 52 week low for this puppy ( S) is 2.80 and stock is only up $1 from low in the current market, as you mentioned sooner or later channel needs to break. Stay sharp!

    Joe

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