Thursday, October 08, 2009

Annotated Platinum

This is my comment to the post of this chart at the Big Picture...

With respect to Gold, it is probably outperforming the rest because it is least tied to actual economic activity. I’m thinking that Aluminum and Platinum are lagging the rest because of their connection to the Auto industry. Copper is doing relatively well with the massive China buying and hopes for an economic recovery on the horizon. Silver is doing fairly well though not as well as Gold. I’m thinking that it is due to its hybrid quality of precious metal (inflation hedge) and industrial metal…

I do these charts as a way to get people to discuss the issues, and to hear what the readers are thinking, not to enforce my view on them. I never felt the need to do this before but I should mention that I have no investment positions in any of these metals, futures tied to these metals, or in any stocks in the metals space.

If I were to glean anything from this chart re: actual trading advice, the dashed line around $1359, has been acting as a key support and resistance level throughout the timeframe depicted in this chart. Therefore, if it breaks out above that level, I would buy it on a retest of the breakout as it pulls back to what would then be support around the 1360 area. This way good stops could be put in position to litigate your downside risk.

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