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Platinum Futures

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Platinum Set to Bottom - Time to position LongThis week the COT report for Platinum has a interesting story to tell. Please click here. www.screencast.com This is a 4 month view of Commercial activity in Platinum Futures. Factoring in a weighting and volatility component, we measure participant positioning and activity and then score this on a 18 month and 5yr basis. This is reflected as a Relative Strength Score from 0-100%. Notable points here: 1 - Commercial Net Position scores a 91% on a 18m basis.2 - Commercial Longs @ 19,708, score 100% on a 18m basis.3 - Commercial Shorts of (33,473) score a 84% on a 18 month basis.4 - We see that this accumulation has occurred on a continuous basis over the past 4 months, as price has dropped from over 1,000 to below 900. We now measure price dispersion for every instance where Commercial net position scored 90%+ on a 18 month basis. www.screencast.com What we see is that on a 20 day forward interval, 70% of the time price advances $27.50 vs declines of only (16) for odds of 7:4 in the bulls camp. The baseline 70% movement of Platinum going back to 2004 is $24 up vs (20) down, so we see distinct out-performance as odds have improved from 6:5 to now 7:4. Further adding to the favorable odds is that we are approaching the seasonally strong period. Going back to 2000, the months of July + Aug have seen a 61% winning percentage with the average combined price advance of 8% over that period. The next point we want to highlight is how Platinum has traded during the past 18 months. Please click here: www.screencast.com We can see that Platinum has been range bound over the prior 18 months. What is interesting to note is how it behaves at the bottom of it's price cycle. What we see is that declines end on sharp down trading weeks with significant increases in volume. Standard Technical Analysis theory will flag this as a confirmation of trend continuing, and encourage more shorting here, which is exactly what trend following algos are doing. However, we can clearly see that this type of price action has been marking bottoms like a clock. As a final note, with 70% of PGM production coming from South Africa, there is large geo-political risk to future production. Currently there are threats of government takeover of mining assets, upcoming wage negotiations with labor unions, as well as a silent genocide of South African farmers taking place. This is not the backdrop we'd want to be short of the platinum metals group. Conclusion As technicals are all extremely bearish, and we don't want to fade this strength, wait for some indication of price reversal before entry. A close above 893, the May 2 low, will give first indication of a bear trap, as all of those shorting the breakdown from 2 weeks back will be hit with quick losses. www.screencast.com Unfortunately there is not a liquid options market to hedge here, so we would use smaller position size and wide stops as a strategy. Go long at 893, using 860 as a stop. Unfortunately there is not a liquid options market to hedge here, so we would use smaller position size and wide stops as a strategy. Go long at 893, using 860 as a stop. Look to ride the position higher throughout the summer for $90 or better, giving you 3-1 R/R. Alchymist Do you know the odds of each bet you make in the futures market? You can. www.3ptcap.com
NYMEX:PL1!Long
by Mr_Dent
Everyone is buying cryptos, while PL looks "precious"Pun intended. All I hear from the post office guy or my friend's aunt or whomever wants to talk about finance is, what's going on with these cryptos. There's decent coin to be made on the precious metals here. Let me quarterback this out. Initial Margin in PL: $1925 A 25 handle move = $50/handle x 25 = $1250 profit, less commissions. ROI = 65% For any investor/trader to make 65% on a crypto from here would mean. Now if I go on bitmex and trade a perpetual inverse swap, now we're talking! BTC from 7800 to 12,870 ETH from 330 to 544.50 I love trading all assets and don't have biases toward any particular one. Important factors remain the same: liquidity, volatility, slippage, flow and hours and feel for it watching the tape. One isn't better than the other. It's the one that suits your trading style, personality, risk tolerance, sleep-like-a-rock-ness, and obviously, profit potential. Point being trade it all, learn it all. Try it all. Then figure out which one you can get really really good at and focus on that.
NYMEX:PL1!Long
by kinetictrading
Platinum Futures. Watching and Waiting to go LongPlatinum, along with gold and silver, have been in a decline for the past month (20 bars) with no reprieve in sight. We will be looking at previous S/R zone of 890-900 for entry points. Bottoming is usually a process and we never look to "pick the bottom". We've learned over the decades that that's a losing game with a negative ROI. We are merely examining which spots give us the highest probability and then use prudent risk/reward management to entry and exit trades with predefined stops and targets. Let's keep it simple.
NYMEX:PL1!Long
by kinetictrading