After a strong rally in late June, palladium corrected in late July and early August - the same as gold and silver. A few days into August, however, Palladium diverged from the other PMs and started rallying as can be seen by the 9 consecutive white candlesticks on the chart. This past Friday, Palladium blasted through overhead resistance on significant volume on its way to a 13-year high. (As a side note, its all-time high was established in early 2001 and lasted only a couple months before crashing down in the dot-com bubble burst) Its MACD just made a bullish cross and its RSI remains solidly above the center line - two positive indicators confirming the breakout. Also, note the bullish hammer formation on the Friday candlestick. This means that after an early drop, price recovered and closed in the upper half of the day's trading range.
So why is this significant?
If palladium trades in concert with gold and silver, then we have a major divergence that needs to be resolved. As I showed a couple days ago, gold and silver have really languished since they started correcting in mid-July. If PMs move together, then one of two things needs to happen. Either 1) Palladium needs to be sold down or 2) gold and silver need to rise to close the performance gap. Given all of the bullish chart setups and breakouts in the miners, my money is on gold and silver will rally from here.