Palladium rose to 912 on 1st September, but was unable to keep the bullish momentum and is currently trading close to 830. We are interested not only in the decline itself, but in its wave structure as well, because it can give us a hint of what to expect from now on. The Elliott Wave Principle is the method we use, when analyzing price charts.
According to the Wave Principle, the direction of the trend is demonstrated through five-wave sequences, called impulses. There is one such impulse on the chart of palladium shown above, which means we should accept that the trend is to the downside. However, this does not mean that prices will fall all the time. Usually, trends are interrupted by the so-called corrections. Elliotticians know, that after every five waves, there should be a three-wave correction in the opposite direction. And since palladium has already drawn a five-wave decline, we are preparing for a temporary recovery.
