Momentum is Positive, But Supply Chain Heating Up

Dear Fellow Investors,

In the following video, I’m talking about the latest challenges to the supply chain. 

Listen, I do my best to leave politics out of market commentary. It doesn’t matter to me who is in charge. All that matters is that we can adjust accordingly. 
What’s happening in the supply chain will not be solved by administrative action. The only cure to supply chain woes today is time.

If you want to profit from this trend, I suggest you watch this video.

Earnings Season Kicks Off

Overall, it was a solid start to the earnings calendar from JPMorgan Chase, Citigroup, and Goldman Sachs. 

But we have a lot of work to do before we get excited about the momentum rip that we witnessed on Thursday and Friday. It’s good to see that a lot of money is coming off the sidelines. 

Right now, just 45% of stocks are trading under their 50-day moving average. I can’t stress what a positive development this is for mid-cap and small-cap stocks that traded sideways for months. 

But a lot of big names are starting to face enormous pressures. I’m talking about stocks like AT&T, Intel Corporation, and United Airlines. 

Banks aren’t facing any supply chain issues right now. But these three companies certainly do. 

AT&T just laid out a huge promotion for iPhone 13s, and now there may be a shortage of those items. 

Intel is at the center of a semiconductor crunch. 

And United – well – they face pilot and staff shortages at a time that fuel costs are surging. 

Let’s not have any illusions about what we’re facing in the future. We’re going to have supply chain, fuel, and inflationary pressures. 

Is it the 1970s all over again? I don’t know. I wasn’t there. 

But this does feel a bit more like 2006 right now than at any point. 

And I do want to play as much defense as I can in the weeks ahead. 

Positions in Play

Remember, we have exited our positions in Atlas Air Worldwide (NASDAQ:AAWW) and the November 19, 2021 $9.00 call in American Axle (NYSE:AXL) (AXL211119C00009000).

We’re still holding our stock position in AXL.

In addition, I stress that you should exit your Gaming and Leisure Properties (NASDAQ:GLPI) Oct. 15, 2021 $45 call today (GLPI211015C00045000). 

The stock is trading just under $50 per share, meaning that the intrinsic value of this contract is right around $5. 

If you haven’t sold it yet, you can do so at the best price possible and still net a very positive gain. The current Bid for the contract is $4.90. 

Finally, our Levi Stauss (NYSE:LEVI) position did not work out. It will expire worthless today. 

We’re still holding onto ICICI Bank (NYSE:IBN) and Skechers (NYSE:SKX). I breakdown both of these stocks in the video above. 

Have a good weekend,

Garrett Baldwin

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