Platinum futures are up more than 600% over the past 10 years and have almost doubled from 1,200 to 2,053 over the past twelve months.

What catches my eye is the extreme run-up over the past two months as the metal seems to be making a climax run (out of character during the 10-year up-trend). Similar action started to happen in PTR and I highlighted it in the exact manner as I am doing here with $PLAT in a post titled The Real PTR Climax Run.

Petrochina, currently trading at $150, is now 50% off of its high of $266.81, a number reached during the climax run. I was a little early with PTR when I wrote the post Petrochina (PTR) Climax Top? back in September 2007.

Based on my PTR analysis, wait for the breakdown in Platinum to begin prior to picking a top, if it even happens. This is a game of odds and we can’t be 100% certain that Platinum is going to breakdown and correct by more than 20% over the next six months. However, I will establish a position when the ideal entry presents itself. The ideal entry could be a large reversal on heavy volume while making new highs early in the day and/or week or it could be a series of large down days on increasing, above average volume.

I do want to be clear that I am not suggesting that the long term multi-year run in Platinum is over but a correction of more than 20% may be in the works.

What do you think?