Once $1500 on the September futures breaks, I expect a quick and decisive fall to $1300. Additional things I see which makes this a high conviction trade:
1.) Seasonal pattern for XPDUSD is usually weak in mid-July until mid-August/early-September
2.) $1500 was a major breaking point in March as well. Once prices broke that level, the selling came in swiftly.
3.) The NYMEX futures CoT shows the commercials (smart money) is short around the same number of contracts just prior to the March crash as well.
4.) There was a marginal, new swing high in the futures but not in the cash market this month. Prices have since reversed back down off of the $1600 level quite rapidly. This tells me there are ready and willing commercial sellers at those higher levels thus capping prices further (for the time being).
5.) The contract margins for PA on NYMEX are over $12,000 for a 100oz. contract. This is reminiscent of Silver Futures in May 2011 just before the price peaked and promptly crashed..
There seems to be some intermediate support right around the $1300-$1275 level so I would look to cover there...
Thanks to @thunderpips for the 6H/4C chart idea..
1.) Seasonal pattern for XPDUSD is usually weak in mid-July until mid-August/early-September
2.) $1500 was a major breaking point in March as well. Once prices broke that level, the selling came in swiftly.
3.) The NYMEX futures CoT shows the commercials (smart money) is short around the same number of contracts just prior to the March crash as well.
4.) There was a marginal, new swing high in the futures but not in the cash market this month. Prices have since reversed back down off of the $1600 level quite rapidly. This tells me there are ready and willing commercial sellers at those higher levels thus capping prices further (for the time being).
5.) The contract margins for PA on NYMEX are over $12,000 for a 100oz. contract. This is reminiscent of Silver Futures in May 2011 just before the price peaked and promptly crashed..
There seems to be some intermediate support right around the $1300-$1275 level so I would look to cover there...
Thanks to @thunderpips for the 6H/4C chart idea..
Trade active:
Trade has automatically executed as XPD/PA has broken the 16-July swing low. Targeting $1300 to cover..
Trade active:
Would need to cover and re-evaluate should prices begin to move over last week's swing high of 1548.50-50.00
Trade closed: stop reached