Sneaky Strength

Headed into this week, we noted with Members in my usual Weekend Strategy Video that we could easily see a low volume, drifting affair in markets leading up to Independence Day on Thursday, alongside markets closing early tomorrow at 1pm EST. Indeed, the jobs report Friday morning looks to be the next known event which markets may be on cruise control until then, especially with the holiday approaching. 

And as we speak, the action in equities is drifting, mixed, uninspired. 

However, there is notable sneaky strength in the overlooked precious metal, palladium, with its PALL ETF, below, on the daily chart. We have discussed PALL previously. And recently there was some bullish Russia protectionist headlines regarding the metal. Note that the largest use of palladium today is in catalytic converters, which criminals seem to be highly bullish on these days. It is also used to make springs for watches, surgical instruments, electrical contacts and dental fillings and crowns.

Either way, PALL is a spark in an otherwise sluggish tape. Technically, the ETF is breaking its resistance downtrend line and threatening to take out its 200-day moving average, above. 

Even with gold and silver consolidating for a few months now, if PALL sustains this breakout I view it as a bullish sign for the precious metals at-large, evidence of the rally broadening out since March.