It's time to keep an eye on platinum and the aussie dollar

Key points

• Platinum is headed into an unfavorable period, and the Aussie Dollar is already there
• Seasonality is "climate, not weather," i.e., it is not a roadmap of what will happen, only a history of tendencies in the past
• Entering an "unfavorable seasonal period" is not an automatic sell signal, but it does tell traders where to look for potentially significant opportunities

Platinum will soon enter an unfavorable period

The chart below displays the annual seasonal trend for platinum futures.

The red box highlights the period that extends from the close on Trading Day of Year #149 through TDY #198. For 2023 this period extends from the close on 2023-07-28 through the close on 2023-10-05.

The chart below displays the hypothetical cumulative $ +(-) from holding a long position in platinum futures only during this unfavorable period every year since 1987.

The table below summarizes platinum futures performance during this unfavorable period.

The Aussie Dollar is already in an unfavorable period

The chart below displays the annual seasonal trend for Aussie (i.e., Australian) Dollar futures.

The red box highlights the period that extends from the close on Trading Day of Year #145 through TDY #198. For 2023 this period extends from the close on 2023-07-21 through the close on 2023-10-05. So far, the Aussie Dollar has crept slightly higher since 2023-07-21. Alert traders might watch this market closely for any sign of a downside reversal and a potential entry point on the short side.

The chart below displays the hypothetical cumulative $ +(-) from holding a long position in Aussie Dollar futures only during this unfavorable period every year since 1987.

The table below summarizes Aussie Dollar futures performance during this unfavorable period.

What the research tells us…

Seasonality tells a trader what markets to focus on at a given time and in which direction to lean. Historical tendencies tell us to look for an opportunity to trade the short side of platinum and the Aussie Dollar. Deciding how much capital to allocate, when to enter, and when to exit a trade remains the responsibility of each trader.