Source: Maurice Jackson for Streetwise Reports 05/08/2018
Technical analyst Chris Vermeulen of Technical Traders speaks with Maurice Jackson of Proven and Probable about what he sees in the charts for Platinum Group Metals.
Maurice Jackson: Joining us today is Chris Vermeulen of Technical Traders. Today, we will be discussing why you should consider platinum in your portfolio.
Chris, we’re delighted to have you on our show today to discuss a topic that really resonates with me, and that is platinum. Before we begin, tell us about Technical Traders.
Chris Vermeulen: I started trading when I was 16, and I’ve been trading almost full time for 21 years. Started in high school and traded through college. Eventually, my goal was to trade full time. I wanted to run a newsletter and help other traders. Technical Traders just evolved over the last 21 years. It’s all I do. We have a newsletter and a big following, with users in over 87 countries. I help traders learn to trade and spot opportunities, and I share every trade that I do with subscribers.
I’m a pure, technical analyst. I think I’m as pure as they come just because I do not watch or read news. I don’t follow earnings. I could care less of what’s going on in the world. I pretty much turn on my trading system, and I look at the charts. To me, it’s just the video game, the ultimate game of play the bars, play price action, momentum and strictly, I’m just trying to pull money of the market. So I’m 100% technical analyst, and I don’t let anything work into my analysis other than that.
Maurice Jackson: We’re delighted to hear your perspective because we look at things more from a fundamental standpoint, so it’s good to hear what your thesis will be here. Chris, speculators and investors in this space usually are gold-centric, to a varying silver-centric, and they overlook the platinum group metals. For someone new to technical analysis, share with us what is the COT, and how does that influence your thesis?
Chris Vermeulen: The COT is the Commitment of Traders. All it really is, you can actually see it on FINVIZ website if you pull up platinum chart. You’ll see underneath that they show the COT. It really is just telling you who the big players are. There are commercial traders, large traders and the small, speculative traders. What I look for on the COT data is when these bands pinch, the level of large traders, their positions in platinum. I look for those to drop down. I look for the large commercial hedge positions to start to get back to neutral. They’re usually always negative because they have to balance out all the positive trading positions. Usually what happens is when the COT data pinches, meaning there isn’t a whole lot of direction, people aren’t really long or short, that’s usually a sign where the market is getting ready to have another move. The COT data recently has been slowly moving, pinching to get to a very neutral position on platinum. And platinum has been fading down into a support zone. There’s a lot of technical things coming into play here, where I think we’re ready to see a pretty big pop, a significant pop and rally in platinum sometime this year.
Maurice Jackson: Share your thesis with us regarding the technicals for platinum and why it has your interest.
Chris Vermeulen: The big driver, what really got me excited about platinum is that I use a lot of cycle analysis, and I’ve created my own cycle indicators to follow various time frames on the market. When you go back in time and you look at what platinum did back in 2007, 2008, and we look at the price action now at what platinum is doing, and I overlay my cycle analysis, when I look on the chart of platinum, on the weekly chart, we’ve got more or less another week or two potentially of platinum being a little bit under pressure here.
Pretty much all the metals are trying to bottom. But then we’ve got a major cycle to the upside, meaning, we should see platinum rally for probably 6 to 12 weeks after we bottom out here. The cycle looks very strong. If this rally is strong enough, it’s actually going to break platinum out of this downward channel that it’s been forming, and we could see an explosive move similar to what we saw in 2007, 2008, which is huge rip-your-face-off type rally, where is just explodes, and everyone gets excited about platinum, much like the bitcoin pop that we saw in December and January. It’s that type of euphoric stage where we could see platinum do that same type of thing again because the monthly cycles show a huge upswing, multiple cycles coming together, forming a very powerful move.
So the cycle analysis, it has me most excited about platinum. Because the cycles are aligning with what I think is the late stages of a bull market in stocks and when you look at the price activity and formation of platinum, gold, silver, mining stocks, they’re showing signs that there’s life, that there is something big brewing. So I’m really excited of the timing of this year for precious metals. I think this is a major platform for pretty much all of them to take off and start a new bull market that could last quite a while.
Maurice Jackson: Not to digress here, but recently, you saw a similar pattern in palladium. Share the similarities with us.
Chris Vermeulen: Palladium, it was a long-term chart, looking at the monthly chart going way back to 2000, 2001. A lot of people avoid the monthly charts,. They don’t look at them. The monthly charts are actually extremely powerful when you have a setup. In most cases, it …read more
From:: The Gold Report