Source: Bob Moriarty for Streetwise Reports 12/18/2019
Bob Moriarty of 321gold takes a look at the Daily Sentiment Index for palladium.
The price of palladium has been on a tear lately.
Like every other investor I would love it if every one of my investments went up day after day. But it never seems to happen for me. Actually, in real life, the more days something goes up and the faster it goes up, the greater the risk of a back breaking crash. Palladium prices are up 50% in just over six months. That’s a lot, regardless of supply or demand.
No one wants to learn from this but prices of commodities or stocks have not nearly as much to do with supply and demand as does plain old human nature. You see, we are herd animals and we want to be safe, so we travel with the herd. But if you have ever watched the life span of a sheep or cow or pig, they all end up in the slaughterhouse. They get chopped up and then eaten. If you want to invest with the herd. . .well, good luck with that.
There is a good alternative that takes the very human behavior of buying at tops and selling at bottoms into account. It’s called the DSI, for Daily Sentiment Index. I’ve written a bunch of articles about it and made about 30 predictions of prices about to make a U-turn. All 30 did and that’s not bad. I’d love to say that it was all because I am so smart, but it’s simply not true. You have the same access to the data that will warn you as I do. It’s currently warning that palladium is looking for a top. Maybe not today or tomorrow, but soon. Palladium likes to wander around for sometimes a month or so with nosebleed readings before taking a tumble.
The DSI for palladium has been in excess of 80 for about three weeks. It hit 93 two days ago and settled at 92 on Dec. 16. Very soon now it will top and crash. If you have a subscription to the DSI look for a reading of 95 or above and then get out of the way of the falling safe. If you don’t have a subscription to the DSI, look for another couple of blistering days higher. And it you would like an advantage over the flock of sheep following the metals led by a bunch of parrots, consider a year’s subscription to the DSI. It’s on sale until the end of December.
I don’t get anything out of this other than he has comped me the service for the last couple of years. If you don’t find it one of the most valuable tools you have ever been handed after you use it for some time, write me and I will patiently listen to you whine and I will pat your back for you.
Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
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Charts and graphics provided by the author.