Well, it looks like some of us have missed the train, the gravy boat or whatever you want to call it to wealth, fame and fortune. As an old retired commodities trader I shoulda seen it coming I suppose but I just didn't stop to take a look. I'm not doing any active trading any more. Nerves just can't handle it. But I thought I could still spot an upcoming streaker headed for the moon. Well, that was then and this is now and I missed one. Did you?

Yeah, there's lots of Gold and Silver buffs out here in TB2K land and even a few Platinum fans but how about Palladium? Palladi-what, you ask? Palladium. P-a-l-l-a-d-i-u-m. Palladium. Normally, I used to get warnings about such moves that Palladium has taken. But when your out of the loop, your out of the loop. I'd only begun to notice palladium's moves in the last few days but I never bothered to take a good hard look at it because it either shoots or it dies. I mean from one extreme to the other. Not a real good investing vehicle except under certain circumstances. Well those certain circumstances have come and just as quickly, I suspect they've gone.

Any of you gold bugs note the move today in Palladium? It has had a $100 trading range and is up dramatically for the month from below $500 per ounce to over $800 at last tick as I write this. When Gold tried to make a move past the short-trading bankers and mine hedgers palladium was trading at below $350.00 an ounce. So since September it has doubled in price.

Now before everyone gets excited and says let's go dump so funds, let me say that the current chart pattern is showing a typical head and shoulders formation look. So this February run-up is likely to not last much longer. We should likely see a drop down coming within a few days. Look for the Palladium market to drift lower in coming weeks. She is showing a typical metals market peak. In fact her chart looks nearly identical to the big Gold and Silver historic runs of 1980. I wouldn't think of plunging ahead into palladium anytime soon as we done missed the run, already. Rats!

Platinum: Same deal basically. Chart patterns are different in some degree but essentially it's a less-exaggerated Head and Shoulders formation on the chart. The DMI oscillator is showing the trend is not only weakening but the positive price line is declining and dropping to meet and cross the negative price line...meaning that if they cross below the 20% line then we've got a valid shorting signal. Frankly, I'd say Platinum is poised for a drop of $50 to $100 fairly soon. Palladium will likely drop more but it may advance a little further before she tumbles, not so it would seem with Platinum. Amazing. Can't believe I missed the Palladium run but then it's sat dead for years now. I see that Russia's delivery problems with the metal have triggered the wild price ride.

Meanwhile, I'm sure the gold bugs are gonna wanna know... well Gold has a WEDGIE! Yep, a wedge formation all month long has set in. If we see the market bust to the upside...if she cranks above $310 by Friday...then Gold is going higher. If she can't bust up, she'll blow down and probably test for $280. for the next month or two. If she busts to the upside, it is likely that gold will run on slowly to test $325-$330 and maybe even try to test $340 again like it did last fall. The next 2 days will tell the story for the yellow metal. The DMI oscillator is still open for further bullish movement but of late is showing signs that the movement is losing the big MO and may signal a shorting opportunity.

Silver is in its own little world right now. It looks pathetic in terms of chart patterns. You talk about a manipulated looking chart. Whewee! The DMI oscillator looks a lot like the Gold market and silver will follow Gold's directional lead.

I gave an fuller accounting of oil earlier today on Downstreamers forum...but in a nutshell, oil appears to have finished it's latest bull move at $30.40. We'd figured on $31 or $32. but that was based on primitive measuring as I can't get a really good fix on the cents levels on a given price bar, so I have to guess a bit. So we're off by $.60 on the low side which would be in I suppose a margin. Still, I had thought the move would be a little stronger and hit $31 if not $32.

For now, Oil is gonna tread water for awhile in what we call a sideways trading range... I look for oil to go back now and do some testing in a price range between $30 and $25.00. This will likely take a few weeks (2-6 weeks) to complete. There will be instances during this time frame where it will look like oil will skid lower and other times where it looks like it will test and break above $30. In other words we'll see a lot of false moves. This is all based upon the daily bar charts and oscillators. The weekly and monthly charts are much more powerful and they are still wide open bullish. Lots more bullish movement is yet ahead as it stands now. Essentially we've got a short choppy period ahead so traders can digest positions before developing further price advances. This short and choppy period is healthy for any kind of advancing market. If you don't have these kinds of interludes, then you get a market going straight up and straight down. Oil is not forming a straight up / straight down pattern. In other words, these levels of prices are gonna be around for quite awhile and you're not gonna see $15.00 or $10 oil anytime soon.

[Disclaimer: The above is not intended to be trading advice or recommendations for anyone...but the ravings of an old, silly and somewhat foolish retired metals trader who sometimes gets a call right anyway]

-- Dick Moody (dickmoody@yahoo.com), February 22, 2000

Answers

Thank you for your "market gossip", I really enjoy your writing style.
Please keep 'em a comin'.

-- Possible Impact (posim@hotmail.com), February 22, 2000.

I have mentioned Gold & Silver Reserve (http://www.e-gold.com) numerous times here. Where you can accumulate, trade, spend gold, silver, platinum, palladium. But since physical only, no margin. So you just profit on the moves themselves, no leverage. However, I did start out with all four metals and have sold a little platinum and a little more palladium to put into gold and silver. I'm not concerned, in this account, with the so-called "dollar" value, but playing the metals against each other so as to accumulate OUNCES.

-- A (A@AisA.com), February 22, 2000.

Dick, Thanks a ton for the analysis. I had shifted a small amount of money into a precious metals fund late last fall, so this should be interesting. Surely wish I had some of the physical palladium. Shucks.

-- Mara (MaraWayne@aol.com), February 22, 2000.

I believe I read that Russia produces about 70% of world's palladium and that largest market is in catalytic convertors for autos. With Chechen war expanding to Dagosatan and Georgia, there is concern about palladium availability. As I understand it the big three US auto makers are apying almost any asking price for physical delivery of palladium.

Not sure on how long this situation would last. Other mines are trying to increase their palladium output but require capital and time for expansion of plant capacities.

-- Bill P (porterwn@one.net), February 22, 2000.

Fundamentally speaking.....

OPEC will only raise crude production marginally. They will not raise the number as high as most think. There is an outside chance they will simply extend the current cuts 3 more months. This would send crude to the moon 32-35 per bbl wti. Mexicans made noise of this ilk today, somewhat confirming my theory. The greater confirm for me though was the strength of Brent.

I believe I also saw some confirmation of this in the immense rolling of positions that I saw today. There was some serious weight out there during the day. At one point WTI front(expiration) was up 99cts and then bang erased 50cts in one quick pop. That's a serious move to bang out in the blink of an eye indicating large positions. I think the boyz are still long and they're just waiting for the other shoe to drop (did I mention they own a shoe store?). All this happy graveyard whistling is just that, dead people making noise! Anyway, I also think products will scream in the comming months as we're already short and it appears to me that there are more "squirrels" than normal this year.

Note that two WCoast refiners are having troubles now, Gulf Coast is tight and Chitown is VERY tight. Just wait til we get some more power outs. Yikes.

Thanks again for your analysis Dick. I value your opinion.

-- Gordon (g_gecko_69@hotmail.com), February 22, 2000.

Hey Gordon,

You old fundamentalist, you. :-)

Long time no talk. Ya know, I'd be inclined to agree with you about Opec, but I'm starting to buy into the notion that maybe, just maybe there are still some underlying technical issues that prevents this from happening. Like malfunctioning equipment. What if, it turns out that the embeddeds problems are indeed happening slowly and inch by inch and replacement parts are on a longterm backorder status meaning a slow downward spiral in crude production in key oil wells/fields for the next 6 months or more. Hearing more stories of these kinds of problems in various places and companies. We'll have to see. If these are only half right, Opec and all other producers with automation systems could be hardpressed to increase production.

In the meantime, I still see technically a slowing down in here for a sloppy, choppy trading range, til you fundamentalist boys take the podium and start preachin to the choir again. :-)

Have a goodin. Drop me a line sometime.

-- Dick Moody (dickmoody@yahoo.com), February 22, 2000.

Bill,

Right you are on the Russia connection. What gets me is that this whole thing slipped up on me. Course, I'm retired and don't watch this stuff like I used to but, I did see some pricing on this at the first of the month but I didn't really bother to take a look at it. Oh well.

Palladium is a strategic metal that's for sure. Sounds like Russia really wants as much control of the metal as possible. Course, South Africa is the number 2 source...and then a distant 3rd is/was Canada. And that's it I think.

Hey, now that I think about it...has anyone seen or heard a price on Rhodium lately. IF palladium is up and skyrocketing, I'll bet Rhodium is to the moon for sure. That seems to have always been the case in the past. I've not seen a Rhodium price in ages.

-- Dick Moody (dickmoody@yahoo.com), February 22, 2000.

Bill: Check out www.kitco.com for rodium. Look on Gold Forum for latest price. believe its $2250/oz. Been fortunate on palladium. Bought a 10oz bar some ten years ago at $174/oz. kinda nice with all I've lost over the last three years in metals.

-- Scooter (brucej@infoave.net), February 22, 2000.

Oooops. I meant Dick, not Bill.

-- Scooter (brucej@infoave.net), February 22, 2000.

Thanks, Dick & Gordon, for more good reading.

I'll keep coming back as long as you're around posting for us.

-- jor-el (jor-el@krypton.uni), February 23, 2000.

Thanks for the analysis Dick. When the opportunity presented itself, I was lucky enough to have purchased some March crude oil call options with a $19 strike price. At the time, crude was $15/barrel. Two missed opportunities were going long on gold and holding a strangle position on the Eurodollar. Funds were/are limited. Still waiting on my S&P 500 Leap Dec. put options- strikes at 125,115,110. Difficult markets to decipher. History (i.e.technical indicators, charts) apparently lacks the relevance it once held.

-- NoJo (RSKeiper@aol.com), February 23, 2000.

Has anyone (Dick, Gordon?) heard any rumblings about palladium and its connection with hydrogen fuel cell technology? A coworker just pointed me at a thread on another board, Longwaves, that could be just rumor mongering, but several posters there are making noises about a new energy technology that will be announced in a few months. The result, according to one, would be a "dumping of oil." (I'm undecided about the Longwaves forum -- they seem to spend more time slicing and dicing each other than actually accomplishing much.) Any additional news would be welcome. Didn't we once have a regular here who works for a fuel-cell company in Canada?

-- Cash (cash@andcarry.com), February 23, 2000.