One of the key themes we’ve discussed since early November is money looking for a new home in beaten-down areas of the market. That theme continued today with the Federal Reserve confirming the market’s rate cut bets with a dovish statement and projections. 💸
We saw significant rallies in stocks like Carvana, Upstart, SoFi Technologies, Lucid Group, Rocket Companies, and many more highly-shorted names. But it’s not just happening in the stock market. Assets across the board rallied, including one of this year’s worst performers, palladium.
Below is a chart of palladium futures, which jumped 12% today. That type of move would typically be more than enough to grab people’s attention, but where it’s taking place amplified the importance among traders. ðŸ§
Palladium’s been in a clear downtrend for the last eighteen months, with a clear downtrend line, keeping a lid on prices. However, prices are now testing that downtrend line again. And they’re doing so while also breaking above its previous price low, something they’ve been unable to do all year. 🤔
Technical analysts say a decisive breakout above this level would confirm that its trend has shifted from down to sideways or up, depending on who you ask. With animal spirits taking hold of the market this week, bulls say this is when palladium and other laggards have their best chance to meaningfully change their trends.
We’ll have to wait and see who is right. But palladium bulls are coming out of the woodwork for the first time in years, and that’s notable to us. 👀