Platinum pressured by supply concerns

This is a significant down day for many risk-on assets, namely the equity markets as well as commodities. The S&P 500 futures are down around 1.7% this morning, almost getting below 1400. This has been a quick and steep drop from above 1450 just days ago. Corporate earnings season has been disappointing for stock market investors. But perhaps many are seeing these levels as a chance to pick up shares for longer term strategies.

Even with positive housing numbers in the U.S., markets are apparently very concerned with continuing negative developments pertaining to Spain. We need to see consumers all over the world finding work, making money and supporting the respective economies where they live. This can happen with business-friendly policies plus sound financial institutions in place. Crude oil is continuing to exhibit very bearish activity below our key pivot level of $93. Our next target beneath current prices is the $82 level, and we think this can happen very soon.

We focus on platinum futures today. All precious metals are down this morning, with palladium actually leading the way down at -4% as of this writing. Platinum futures, after a rapid rally because of supply concerns, have now started a recent downtrend from highs earlier this month.  Platinum is now down $30 on the day, almost -2%.  Platinum has broken down through a key support level of $1,600. It is approaching our next support level at $1,560, and we think the $1,540 will slow down platinum’s descent, and we might start to see some back and forth trade at those levels (if the market gets there). Our key pivot of $1,650 serves as our upper resistance level. We see a potential for Platinum futures to find a short- to medium-term trading range between $1,550 and $1,650.

Click to enlarge.

About the Author
Anthony Lazzara

Anthony Lazzara, CEO of Newport Beach, Calif., commodities investment firm Lido Isle Advisors, spent 10 years as a trader and floor broker at the Chicago Board of Trade and Chicago Mercantile Exchange. Anthony has significant experience in the energy, fixed income, and equity futures markets. After being a long-time independent futures trader, Anthony saw a tremendous opportunity to educate investors on how to invest in professional traders. Anthony is now focused on his duty as CEO of Lido Isle Advisors.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome