While i'm surprised to not see much media coverage of gold, despite the fact that it's north of US$1600 this morning. We are getting a lot of commentary about TSLA and palladium. In fact, yesterday I posted a Twitter poll asking which is a better investment from yesterday's prices - more on that later.
Both TSLA and palladium are up BIG year-to-date (TSLA is more than a double while palladium is up more than 30% after doubling since last May). If we use non-logarithmic charts (arithmetic) and zoom in close enough both the TSLA and palladium charts give the appearance of a rocket leaving the earth in a vertical ascent into outer space.
TSLA (Daily - 6 Month)
Palladium (Daily)
However, if we use log charts and put things into perspective on longer term charts then things don't look quite as ridiculous:
TSLA (Weekly - Ten Year)
TSLA is breaking out from a multi-year consolidation between $180 and $390, and while its recent ascent can be called "parabolic" I don't think it's crazy extreme compared to other parabolic moves I have witnessed in the past. Moreover, the largest percentage moves often occur during the final stage of a parabolic rally - in other words the biggest gains often occur during the period where there is the highest risk of a downside reversal.
Palladium (Weekly - 3 Year)
The 3-year palladium chart looks like a strong bull market, nothing crazy about this chart except you wouldn't want to have been betting against this metal in the last few years. Next time sometimes tells you that palladium is a bubble, please ask them how many people they know who actually own any palladium?
Not a palladium explorer or miner, but actual physical palladium - my bet is less than 1 in 1,000 people own any palladium. Not exactly a bubble folks. While palladium is definitely due for a correction at some point soon, I wouldn't want to bet against this metal longer term.
Turning to TSLA, one of my favorite chart guys and a friend mine (@Ty), posted an interesting comparison of TSLA's chart today and silver's blow-off peak in April 2011.
This is TSLA today:
And this was silver in 2011:
There are many similarities between TSLA today and silver on April 25th, 2011 including volume profile, extreme overbought conditions, and a virtually identical candlestick pattern at the top of an extended uptrend.
If @Ty is correct in that TSLA is about to roll-over like silver did in May 2011 then it would help to explain why 75% of the respondents to my Twitter poll chose an ounce of palladium over 3 shares of TSLA:
It will be interesting to look back on this moment and see how things actually played out. I too would choose an ounce of palladium over 3 shares of TSLA today, but isn't the crowd usually wrong?...
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