After a period of short covering, CTAs are now set to add back their shorts in platinum markets in nearly every scenario for prices over the coming week.
“In fact, only a big uptape would prevent CTA selling activity from being catalyzed, and our simulations of future prices even suggest that an uptape will lead to CTA selling activity. Algos could potentially add up to -35% of their max size in a big downtape. This set-up presents significant downside asymmetry for the coming week.”
“In Palladium markets, while current prices are consistent with some CTA buying activity this session, the window for an algo short-squeeze play is already coming to a close, with CTA selling activity now expected to resume even in a flat tape over the coming week. Upside asymmetries have already dissipated, and downside asymmetries are also emerging.”