Technically, the platinum futures market moved to its highest price in over a decade during Thursday's rally.
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However, the futures market's forward curve remains in contango indicating supply and demand is not as tight as what some are talking about.
Don’t Miss a Day: From crude oil to coffee, sign up free for Barchart’s best-in-class commodity analysis. Given this, platinums parabolic rally looks to be a possible blow-off top, technically speaking.
I was visiting with my friend and market reporter for MarketWatch Myra Saefong yesterday about platinum. Myra wanted to know about the market’s “parabolic move”, what some of the technical factors were in play. I’ve talked to Myra for a number of years (decades?) and this is one of the first times I recall her asking about technical analysis specifically. It’s a bit ironic her question comes at a time when I have largely accepted the fact technical analysis is a dinosaur, something we can debate if it ever existed at all. As I’ve said numerous times, today’s markets are driven by algorithms, something I call Watson, and Watson doesn’t care about things like reversal patterns and trendlines. With the help of my son Ben, who just so happens to write our in-house trading programs, a comparison of seasonal noncommercial net-futures positions and the seasonality of the futures markets themselves shows Watson is more interested in fundamental rather than technical patterns. (Keep in mind seasonal analysis shows the normal market cycle tied to changing supply and demand.) I find this market evolution interesting, and something I’ll be discussing in more detail at a later time.
