No AI was used or consulted to make this post, therefore it may be inaccurate or have missed key information. NFA
Whenever gold spikes, publicly traded pawnbrokers usually get a sympathy spike. You can see this in the historical relationship between FirstCash, EZPawn and Gold, shown here through ratios. The absolute level on the Y axis isn't important here, what matters is the directional movements.
[FCFS divided by GLD 1 month chart](https://preview.redd.it/r3xna6ug8ykh1.png?width=1396&format=png&auto=webp&s=1bc897c2a7537f32d97f1bbe93f1aa919521a657)
[EZPW divided by GLD 1 month chart](https://preview.redd.it/31x3dfdn8ykh1.png?width=1388&format=png&auto=webp&s=1d1b785bca06d97c89c5b1f3861feac9f1bb849e)
**What else usually spikes pawnbroker stocks? Interest rates.**
[FCFS divided by US10Y](https://preview.redd.it/csly1zz09ykh1.png?width=1393&format=png&auto=webp&s=ebf3ff00e39b13b376c00ba46f9473810ca13483)
[EZPW divided by US10Y](https://preview.redd.it/il321b569ykh1.png?width=1392&format=png&auto=webp&s=c11a1e73d51cd9fcff91ffca0bc4b3798114261d)
Now, look at what these stocks did on Friday. Fridays are generally considered a "risk off" day where stocks considered moderate to high risk are sold. Conversely, stocks with high buying interest on Friday are more likely to be high-conviction trades. Stocks with high institutional buying interest on Friday (huge volume, tons of resting orders filled) are even more likely to be high-conviction institutional trades.
[FCFS clean break above the 10, 20, and 50 day moving averages](https://preview.redd.it/8fo3lpnp9ykh1.png?width=1390&format=png&auto=webp&s=2c12f80d1edc059fd8c6689838e89c012fa14bba)
[EZPW clean break above the 10, 20 and 50 day moving averages](https://preview.redd.it/by2vrvvs9ykh1.png?width=1410&format=png&auto=webp&s=3707c9529daabce657020ac1739384976adfb743)
Big volume and broke through all 3 major moving averages. I think these companies have solid enough balance sheets for a short term trade (companies that don't are more likely to get dumped at the first sign of trouble):
FirstCash: P/E 25.6, EPS 8.77, debt to equity of around 1.0
EZPawn: P/E 16.2, EPS 1.99, debt to equity under 1.0
The most important factor is: **Jackson Hole (Kevin Warsh) is next week which may be why capital is positioning here ahead of time.**
My positions (bought on Friday after hours): **100 shares of EZPW and 20 shares of FCFS.** ($7,700 of exposure). Targeting a 8% move before I sell half of both positions.