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Charts from the Lunatic Fringe.

Zed

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Up over lower bound of resistance, now offers support. Trapped a little, but at least we have some altitude for Friday.

AU-1H-20190628-3.png
 

Zed

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Zed I can't make any cents of it.
I think that there is some concern @ golds rise and what it may translate into for the fat short position. They are sitting on it fur sure. Gold is leading, this means that the driver is more fear based than normal cyclical metals action. Note bitcoin as well, this appears to be a 'loss of faith' trade more than anything. Given that the credit bubble is now in the .gov space the popping will fall out differently to 2008, I think this is what gold is finally reacting to.

Silver should catch up when the buying gets down the street. Right now I think that the buying is @ a much higher level. JMO.
 

Zed

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Yo Stone man!

Patience man. Keep swinging that hammer and silver will eventually rub your weary feet.
When she gets up late she is full of energy and mischief!
 

Zed

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We have possible flag developing and it is projecting the highs @ 1433 give or take, should it develop further and break upward.
 

Zed

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- 1.5% right off the open. Lets see how Friday nerves go today!
Flat EOD... not bad really. We held onto every gain this week. Some confidence there.
 

savvydon

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Ok week is done and in the books. Gold held the fort and we don't get to hear about any hissy fit from Zed.

While I am sure there are going to be challenges and retests coming up, I think today's close solidifies this move up for gold. There is no denying that resistance has been broken. Whatever happens going forward, the wind has shifted.
 

davycoppitt

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Pardon my ignorance, but what do bank buyback mean? I know that the banks buy back their shares, but what does this accomplish? Push up stock price by them buying their own shares? Good for the company or bad?
 

savvydon

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Pardon my ignorance, but what do bank buyback mean? I know that the banks buy back their shares, but what does this accomplish? Push up stock price by them buying their own shares? Good for the company or bad?
My simple minded understanding is that it is a sanctioned circle jerk. The banks get whatever support they need to stay afloat and continue to manipulate, er, trade their way to profitability, then they plow back those profits into buying their own stock, making them more 'valuable'. Seems like a shell game/Ponzi scheme to me.
 

Zed

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Pardon my ignorance, but what do bank buyback mean? I know that the banks buy back their shares, but what does this accomplish? Push up stock price by them buying their own shares? Good for the company or bad?
It is a way of returning value to long term share holders. Sometimes when there are limited expansion options it makes more sense to use profit to buy back shares and increase the dividend paid per share. It can be a solid strategy. When you get into an environment of artificially low rates this can become somewhat distorted. If a company can raise money @ say 1% and it is returning say 3% on invested capital can makes sense to borrow as much as you can to buy equity back. If the company is confident of its ability to maintain profit then it is effectively handing its share holders the margin of 2% (3% - 1%) by borrowing and buying back its own stock. This is the reverse of what most gold miners do, aka dilute ownership by constantly issuing new stock. So, the question is how sustainable is it? and what does it say that they can't find expansion opportunity with such cheap money available?

So, it all depends on the why, and how? At the bottom of a cycle with a strong and undervalued business it can be a boon, but I am not sure about the current buy back craze... crazes are never good.

https://www.investopedia.com/ask/answers/042015/why-would-company-buyback-its-own-shares.asp
 
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"It is a way of returning value to long term share holders. Sometimes when there are limited expansion options it makes more sense to use profit to buy back shares and increase the dividend paid per share." I should have listened to the pros on buying technology shares when they were making enormouse profits. It's now challenging to figure out if they paid too much for share buybacks that the markets becomes stagnated for a LONG LONG time and then we see 2 Trillion market caps down the road. This makes a good point that commodities and other sectors have to play catch up.
 

Uglytruth

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profit divided into fewer outstanding shares = increased profit per share.

Makes it look like an attractive investment on the outside. The company could not be doing well but it masks the reality.
 

Zed

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profit divided into fewer outstanding shares = increased profit per share.

Makes it look like an attractive investment on the outside. The company could not be doing well but it masks the reality.
I suspect a lot has to do with management upping their total return. I'd be looking @ insider selling of late to get a feel for it. Maybe the rats are fattening up prior to an expected lean period.

Pure speculation.

Off course!

 

Strawboss

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Yes, it all depends. It can be good, it can be a cheat.
Considering the context...aka these are the biggest banks in the world doing this...strongly "suggests" that this is of the cheating variety...

Cheating is after all what they do...

Buying back shares...especially done with cheap debt procured at very low interest rates allows for them to artificially create buyers that otherwise wouldnt exist...thus pushing up a stock price - but at the same time saddling the same company with onerous debt burdens that will have to be dealt with by future management.

And...when you consider that all of the senior managements compensation structures are tied to the stock's performance...then you can truly understand what is ultimately driving the "buy backs" financed with cheap debt.
 

Zed

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Considering the context...aka these are the biggest banks in the world doing this...strongly "suggests" that this is of the cheating variety...
Yes... and the whole damn market is doing it. It seems epidemic at the mo!
 
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Zed

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A note on sentiment.

Some of you guys might remember the days when I, and some others, would suggest that a price retracement or correction was due and we would be attacked by a whole tribe of rabid bulls. We'd get accused of all sorts of nonsense and have all manner of 'fundamental' 'facts' thrown at us.

All it took to bring this on was suggesting as little as a $20 correction.

Fast forward to today. I, and others, have been suggesting a $50 to $80 correction, from the recent peak, back to the mid 13s and not one attack! More than that I see general agreement that this is a possibility that should be allowed for.

This is a critical evolution in the psychology of this market, the smaller players have matured some what and the weaker hands are long gone. IRONICALLY this lowers the odds that the correction will be as deep as it might otherwise be.

My 2c worth for the day!

WOOHOOOOOOO, +1400 close on the month.... now we can see where the floor is in the 13's.
 

savvydon

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Already pushed down to 3983 bottom (won't see it on the charts because it was so brief at the onset). If may have more legs down to stabilize as the floor. I don't know why the dollar is ralllying... maybe US markets are too strong.
This may be a market response to some of what has been going on over at the G20 this weekend. Should be interesting to see if London and New York see it the same way.
 

Zed

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Hey Zed, I saw this on ZH and thought of you and if you had thoughts on Australian investment sentiments for those with 50mil to 1/2 a bil to play with
https://www.zerohedge.com/news/2019...disbelief-australias-record-low-bond-yields-0
The thing is that our government debt is low so the chance or repayment is quite high. Much like Canada our big issue is huge private debt. That is not to say that rates will stay low, they will rise and getting out of long term debt early on the secondary market without losses will be impossible. So, not a good deal IMO.
 

Zed

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Selling off down here, discounting lower gold today!
 

Zed

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The Craft Brew Bubble!!!!

 

Zed

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BTW... Love the $20 smash on the globex open! Smells like desperation to me, or teen spirit, I get the two mixed up.