Potential signal
I am selling Platinum just under $1700, with a stop at $1710, and a target of $1650.
Platinum looks horrible on Tuesday as we are now getting ready to break down below a swing low that opens up the possibility of testing the early part of December lows last year.
Ultimately, we are seeing interest rates drop and metals drop. That is a very interesting turn of events because we at one point in time had a negative correlation; if rates dropped, metals would rally, but this looks horrible.
Shattering Correlations and Macro Risks
We are now possibly looking at the $1,500 region as a target. Now, I do think that there's a lot of noise between here and there, so I don't necessarily know if it just falls off of a cliff, but keep in mind the platinum market is somewhat small, so it could.
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Short-term rallies at this point, I just don't trust until we recapture the $1,800 level. We are now threatening $1,700, which of course is a large round psychologically significant figure. If we do break down below there, I think it's a short. I think we go looking for $1,500 before it's all said and done.
This is particularly interesting because of the shattering of the interest rate correlation that we had seen previously, and that means the market is changing. It looks to me like everybody is running away from anything close to being risk appetite driven. All one has to do is look at the US indices during the session; they got absolutely pummeled for the second time in the last five trading days.
So maybe something is about to kick off. If it does, it could be a buying opportunity down the road, but in the short term, this is a very dangerous market. And when I say dangerous market, I mean everything, not just platinum.
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