Another month has rolled by and the platinum/gold spread once again made a lower monthly high and a lower monthly low. At the June 22nd contract low of -$123.20, the spread has spread wiped out three-quarters of the entire run from the 2012 record low to the 2014 double top. Unless a reversal pattern materializes, the spread remains on track for a return to a double bottom at the nearest-futures record lows at the December 7, 2011 low of -$218.90 and the August 10, 2012 low of -$219.80.
The October platinum/gold spread finds important overhead resistance between the declining 75-day Moving Average around -$62.30 and the June high at -$68.20.
A two-day close above the declining 75-day MA for the first time since early August and a close above a previous month’s high for the first time since March and only the second time during this bear market would alter the bearish price structure. This would signal a bullish trend change and, quite likely, the end of the bear market. Therefore, we will continue to use this as an entry signal to get long.
Cancel the current hypothetical order in the October platinum/gold spread and replace it with a new order to buy two 50/oz. October platinum futures contracts and simultaneously sell one 100 oz. October gold contract if the spread makes a two-day close above the declining 75-day MA (currently around -$62.30) or a one-day close above the June high of -$68.20 (premium gold), whichever occurs first. If filled, the initial liquidation plan is to exit on a two-consecutive day close $5/oz. below the contract low that precedes the entry.