# Palladium at major resistance …

Cliff Notes: Palladium converging into to major resistance.  This is important because it’s a nice little commodity to watch w/ regard to the NASDAQ and AAPL. In order to build the pattern we are going to to go step by step this morning  into “why” Friday’s high was important from a PATTERN perspective.

1. First, here’s WEEKLY charts of 1) NASDAQ and Palladium and 2) AAPL and Palladium.

• notice that when palladium broke out of the consolidating triangle, AAPL took off.
• of late there has been a lead/lag relationship at times BUT the overall directional pivot is clear.  As Palladium goes, so does NASDAQ and AAPL.

2.  When constructing a PATTERN there are three things we do — PROJECT / EXTEND/ RETRACE.  In order to keep this post brief I’ll do the basic stuff …

• PROJECT: note in the two charts below we have 2 “basic” projections coming into the same area.  That warns of resistance.

• EXTEND: note, we used the middle point at 593 for the extension pattern.  Also, note 1.68179 nd 1.732 are used.  musical note and the square root of 3 …

extension from 2008 (shaded light blue triangle)

• RETRACE: from the all time high we have a .786 retracement.  This is NOT a fibonacci number.  Here’s the math- 1.618/square root is 1.27 and 1/1.27 = .786.

so … as you can see, we have a bunch of NUMBERS adding up to this being a big level for Palladium.  And, while a case can be made that, since these are weekly/monthly nodes coming out, it SHOULD be a hefty amount of resistance.  That being said, it could also BLOW RIGHT THRU EM’ and rip higher and higher.  It’s just a pattern folks.

Last – the BUTTERFLY PATTERN is present.  Connect two triangles together and that’s the butterfly pattern …

Butterfly SELL pattern

put it all together and here is the picture:

here’s a potential count — note – 4 doesn’t CLOSE below 1 so I say “go for it” w/ regard to the count. Additionally, alternate targets provided at little higher.  Sure seems like it wants to head up that way … ?