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The Lunatic Fringe - Trading talk.

dpong

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Lancers32

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The govt just put on 87000 new IRS employees. How far fetched is it for them to get people to watch the black market movements. Obviously this will be harder to regulate in very rural areas but in fairly densely populated areas? They have unlimited resources to screw with ya do not underestimate how far they will go to force compliance. They are willing to sacrifice your children via masking and experimental shots.
 

Lancers32

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I would hope that smart money is soaking up the viable ones @ these levels. If they are not value now then when?!!!!
I have that thought then I look at the charts from 2020 and see just how much damage can be done before a major turn develops. As you pointed out in your charts the miners have performed poorly for a long time even worse if you consider how much more stock has been issued the past 20 years.
 

Lancers32

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Nice reversal so far see if it sticks.
 

Uglytruth

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The Simple Facts On Equities And Debt
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No, the market is nowhere near a "buying point" or "bottom."
In fact its probably overpriced at 50% of today's prices -- even with the dump so far.
Here's why.
Have a look at that chart.
Corporations basically never pay off debt; they always roll it over. Since 1980, roughly, the cost of money has always been cheaper, so every time that bond comes due and has to be rolled over the amount of money you must pay in interest on the new one is less.
This in turn means the amount the corporation pays in interest goes down and that means "E", or earnings, go up.
But -- this cycle presumes that rates will never rise. That is, at worst the downward movement will cease, but never go the other way.
Why?
Because if it does (and it is and has for the last six months or so) then every time your bond comes due now you need to pay more in interest on the new one that replaces the old and that makes "E" go down.
"E" is simply what's left of what you take in after you pay expenses, of course, and if you have debt outstanding interest is one of your expenses.
People say The Fed "can't" raise rates. Well, they are. And worse, the TNX, 10 year Treasury, broke range and is likely headed to about 5% which means a "AAA" corporate bond should carry a coupon of somewhere between 5.5-6% because no matter how good that credit may be it is inferior to the US Treasury.
When the best credits out there roll over the next time, which they all will within the next couple to ten years, they will pay that 6% where they were paying 2 or 3%! The only other option is to redeem the bond entirely which means forking up the face value in cash.
Take a firm that is regard as very well-managed -- Berkshire. They have $119 billion in debt outstanding, and are certainly a AAA credit. Let's assume that $119 billion currently carries a 2% coupon, so $2.38 billion in interest expense a year. The firm's net income is $11.7 billion so what happens if the cost of carrying that debt doubles (say much less triples.)
That's a 20% whack off the earnings; if the cost triples its a massive 40%.
How does the "current" 58 P/E sound to you or even the so-called "forward projection" (commonly called a guess) if the earnings crash by nearly half?
Yeah, that's what I thought.
Oh, and this ignores input costs, which of course you can't.
As another example look at FedEx which reported last night. Revenues largely met expectations but EPS missed by a third. Where'd that come from? Costs, obviously. And, I might add, roll costs, that is, the spike higher in interest expense on outstanding debt are not yet showing up in any material size -- but they most-certainly will over coming quarters and years; it is unavoidable for anyone with outstanding paper.
PS: Given the quality of Berkshire's management and operational expertise what you're going to find in most other firms is worse -- and not a little worse either. Buckle up.
 

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Silver is looking to close near the high's for the week. Nice looking close and candle. Not quite as nice as above but still.
 

Lancers32

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Yesterday Gold DSI down to 7. 0 is as low as you can go. Nothing goes down every day even in bear markets doesn't mean we can't rally hard from here but we have seen this repeat since the August 2020 top. Flat.
 

dpong

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My Weekend Trend Trader system is being taken to the wood shed today.

[Mama said there would be days like this.]
 

Voodoo

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Nice looking chart IMO... A nice engulfing bull candlestick today. Bouncing off the gap and 18 dMA while closing well above the 54 dMa. Combined with bullish divergence from the RSI.

PSLV-09-16.jpg
 

Lancers32

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That candle would look a lot better if it came at the end of the down move but yeah it is there. More volume would be nice too.
 

Lancers32

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Bitcoin is a railroad to move money through time and space. Michael Saylor. Keep this boy out of the Manischewitz.
 

Lancers32

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Armstrong sees this quarter as a low in Gold starts up 4th quarter which is right around the corner. So you have a new low in Gold not in Silver most if not all the miners/royalty companies made lows before this last move down. As Voodoo pointed out decent candle in Silver which did not make a new low along with Gold. Even better candles in some of the miners and good volume Friday too.

Low risk longs if you use stops which in the case of most of these stocks is fairly close to Friday's closing prices.

The problem is the stock market looks like it wants to fall off the cliff and I have not seen an example in the previous bulls when they don't take the miners and the metals down on a major flush in the SM. Market has gone up on balance since 1932/1974/1982/1998/2008. Nothing goes up forever.
 

Lancers32

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Not for the faint of heart. Already a double off the bottom. Did not make a new low along with Silver.

ABBRF_2022-09-17_08-51-13.png
 

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The problem is the stock market looks like it wants to fall off the cliff and I have not seen an example in the previous bulls when they don't take the miners and the metals down on a major flush in the SM. Market has gone up on balance since 1932/1974/1982/1998/2008. Nothing goes up forever.
I think the only example is the mid 70's where gold doubled while the stock market dumped. I honestly think we are looking at the same situation coming up.
 

Lancers32

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I think the only example is the mid 70's where gold doubled while the stock market dumped. I honestly think we are looking at the same situation coming up.

What did the mining shares do at that point? Closed the Gold window also but I get your point we'll see how it works out if the SM dumps. Might not. I dunno.
 

Lancers32

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Rates can't go up because that would crash the economy. You think the group that screwed things up are now going to have an answer to the problem? Rate cycle 40 year bottom in place. To da moon.


10 (1).png
 

Lancers32

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I hear Tips are paying 7%. Wanna loan Joe and his clowns your money?
 

Lancers32

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Is pushing for EV racist Corn Pop? Not news but this is a different kind of insanity and ignores climate history but it's truth not facts right you dithering idiot?

 

Voodoo

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I think the only example is the mid 70's where gold doubled while the stock market dumped. I honestly think we are looking at the same situation coming up.

Yea, I think this is a very similar setup to 1970 but this is gonna be the 70's on some hard drugs.
 

Lancers32

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Yea, I think this is a very similar setup to 1970 but this is gonna be the 70's on some hard drugs.

Same setup in what way? The SM topped in 1966 I believe the Dow topped around 1000 and only dropped to 780 after 16 years. I see more danger here so far as a major crash in stocks than 1970-1975. Major crash takes everything with it until it proves it won't. I don't see the metals or the mining stocks showing they can resist a major decline in stocks. We'll see.
 

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I think Powell is on the right track so far. Time to let the air out of the bubbles. I dont know how high he can raise rates but 4 or 5% seems doable.

In 2008 they claimed there was a liquidity crisis. So what really happens when liquidity dries up and the credit markets freeze? Obviously no loans and most if not all commerce ceases to exist.
This is the problem they created with all the government spending and free money for all. So at what point do things begin to break? How high can he go with interest rates and how much liquidity can he drain?
 

Lancers32

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I think Powell is on the right track so far. Time to let the air out of the bubbles. I dont know how high he can raise rates but 4 or 5% seems doable.

In 2008 they claimed there was a liquidity crisis. So what really happens when liquidity dries up and the credit markets freeze? Obviously no loans and most if not all commerce ceases to exist.
This is the problem they created with all the government spending and free money for all. So at what point do things begin to break? How high can he go with interest rates and how much liquidity can he drain?

I can't see the govt doing anything to help anyone with less than FU money. So if they want to own it all they just let everything crash stocks housing the whole 9 and then buy the bottom. Double digit unemployment interest rates higher inflation you name it. They can't lose we will pay for any losses they might incur.
 

gnome

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I have that thought then I look at the charts from 2020 and see just how much damage can be done before a major turn develops. As you pointed out in your charts the miners have performed poorly for a long time even worse if you consider how much more stock has been issued the past 20 years.
Our pain in gold = dollar strength. How much more can the dollar rally? I don't know, but I don't see anything fundamental to reverse the direction of the other major currencies. (Since I've given an opinion, the dollar will probably reverse lower.)

China is lowering interest rates as economy collapses. Japan has a negative nominal interest rate. ECB rates are at 1.25%, planning to raise rates, but GDP is collapsing. BOE is at 1.75%, maybe moving to 2.25%. Meanwhile FRB is at 4% and soon to be 4.75% or higher.

Gold ain't doing too bad elsewhere in the world.

Screen Shot 2022-09-18 at 2.26.43 AM.png
 

Zed

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I have that thought then I look at the charts from 2020 and see just how much damage can be done before a major turn develops. As you pointed out in your charts the miners have performed poorly for a long time even worse if you consider how much more stock has been issued the past 20 years.

Yeah... the industry got a bad name and has suffered for it but to give it it's due they have cut the bad wood and are now lean and mean by comparsion, the only thing yet to turn is the reputation.
 

Zed

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I think the only example is the mid 70's where gold doubled while the stock market dumped. I honestly think we are looking at the same situation coming up.

We need stocks and bonds to be on the nose... not impossible here.
 

perry

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Our pain in gold = dollar strength. How much more can the dollar rally? I don't know, but I don't see anything fundamental to reverse the direction of the other major currencies. (Since I've given an opinion, the dollar will probably reverse lower.)

China is lowering interest rates as economy collapses. Japan has a negative nominal interest rate. ECB rates are at 1.25%, planning to raise rates, but GDP is collapsing. BOE is at 1.75%, maybe moving to 2.25%. Meanwhile FRB is at 4% and soon to be 4.75% or higher.

Gold ain't doing too bad elsewhere in the world.

View attachment 273514
dollar to 155 if mortgage rates above 8.5%??? That would really hurt our econ
 

Zed

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It's that time of year again...

 

Zed

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FOMC - September 20-21 Meeting associated with a Summary of Economic Projections.

I suppose if it is good for gold we will get a pre meet bash over the head.
 

Uglytruth

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