Watch out for the next stage of algo selling activity in Platinum – TDS

Markets expect CTA to continue covering platinum shorts this session, but the risk balance for CTA’s positioning has shifted significantly to the downside, notes TDS Senior Commodity Strategist Daniel Ghali.

The balance of risks for CTA positioning turns to the downside

“Barring continued price growth, we expect CTAs to return to supply with large-scale selling activity expected next week, even in a flat band. And, a big bottom band could trigger massive CTA selling activity totaling up to -50% of the algos max size.”

“While there are still a few scenarios for next week that could lead to continued buying activity from algorithmic trendsetters, the flow setup already points to extreme downside skewness.”