indicators

The Curious Case of Platinum, its Pall and Some Indicator Talk

This is a simple weekly chart we’ve used in NFTRH to watch the precious commodities, AKA Palladium and Platinum.  Very curiously, Palladium has just broken through key resistance while Platinum continues to languish, as if it thinks it’s a precious metal or something.

palladium and platinum

More than what the individual metals are doing, I am interested in what one of them is doing vs. gold because as noted in NFTRH 423, the PALL-Gold ratio is making a major positive economic signal, at least insofar as one economically sensitive (to the positive side) precious metal vs. another (to the negative side) can signal the economy. *

palladium-gold ratio

At first I thought this indicator, like the other economic metal, Doctor Copper, was just reacting to Trump mania and its deficit spending, infrastructure building game plan.  That may well be the case, but a signal is a signal and this one is very positive, economically.

But no indicator exists in a vacuum, and so we presented (also in NFTRH 423) the indicator that we used before and then in conjunction with PALL-Gold to get and stay bullish in the spring up to the current time.  That would be the Semiconductor Equipment ‘bookings’ from SEMI, which led PALL-Gold by a country mile when it established a 3 month uptrend in bookings last spring.  That was our signal.

So it would be all well and good if SEMI were still on its uptrend or remaining flat, but it has now established a 3 month downtrend.  ‘It’s probably nothing’ think the optimists (of which there are plenty right now), but ‘it could be something’ think the realists.

semi

I am not paid to (over) think.  My job is to tell what I see, give my interpretations but also let others review and consider for themselves.  What I see here is a whole lot of bullish going on and counter-cyclical gold going to hell in a hand basket.  I also see some concerning signs, not least of which are the newly brave dumb money, which I have been going on about for a while now.  But I also wonder about this last cyclical indicator.  Is it telling us something not so pleasant?

By the way, we are getting hit with a blitz of data this week; from GDP to ADP to ISM to NFP (ha ha ha, gotta love the abbreviations).  These things all lag the likes of the cyclical SEMI report.  So again, is this a blip or a signal?

* As often stated, no one indicator exists in a vacuum.  Beware those extrapolating authoritative forecasts based on one secret sauce that is not cross referenced against several other views. 

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