I’m writing to let you know that, unfortunately, we will soon no longer publish Two-Stroke Trader. But don’t worry, I’m not going anywhere until we’ve closed all our open positions.
I enjoyed our journey together and hope you’re a better trader for it. And while I’m sad to see this service go, I think you’ll be excited about what’s coming next…
I’ve arranged for you to receive Jeff Zananiri’s Money Flows Elite service for the next 12 months at no charge!
In case you’re not familiar with Jeff and his background, he spent over two decades on Wall Street seeing firsthand how the best made consistent money in the market. He mastered the art of trading as part of a small group that turned $5.1 million in seed capital into over $700 million.
He then went on to enjoy a career with the most elite firms on Wall Street before becoming a top trading expert with WealthPress. He’s navigated tricky markets like we’re seeing today, and specializes in hedged strategies, which is exactly what you’ll get with Money Flows Elite.
The service tracks which stocks institutional money is flowing in and out of over the first two trading days of every month. Jeff then issues NINE trade ideas — usually SIX long and THREE short trades — on the third trading day of every month.
This happens every single month… and he tracks and updates his members at least once a week, closing the positions on the final trading day of each month.
But like I said, you’ll get more details in the coming days, along with credentials to access his members’ area on WealthPress.com. I’m confident you’ll find plenty of value in the education and trading ideas Jeff delivers.
Our latest trade has delivered another strong gain.
That brings this portfolio completely to cash.
With the Fed now tapering, I remind you that there is still going to be $540 billion flowing into the market though 2022.
It’s not time to start worrying about the market or a pullback.
Instead, we need to embrace the Fed as they paper over the deflationary elements of the COVID-19 crisis.
I explain what’s happening right now in the video below.
We had a great trade with Fiserv. I’ll discuss it, the secret behind my strategy, and what’s next for Surge Point Trader.
What Comes Next
Following conversations with my publisher, I’m moving onto some more exciting challenges with the company and reassessing how we can bring you the best financial research possible.
This means that we’ll be concluding our portfolio and service with Surge Point Trader.
I’m not going anywhere. I’ll still be authoring Godesburg’s Haven Investment Letter on a daily basis, and providing you with free insight that can give you an edge in any market.
So, what happens now?
As you know, my colleague Dr. Gregor Bauer has an exceptional service and track record with Two-Stroke Trader.
He has redesigned his service to include more trades and more opportunities for you to profit in today’s market.
For those of you who are not members of Two-Stroke Trader, we’ll be giving you a free year of his service.
For those who are already members, you’ll receive an additional, complimentary year of Two-Stroke Trader.
I hope that you’ll continue to follow my writing and research at Godesburg’s Haven Investment Letter.
I wish you the best in your trading and investing endeavors.
Thank you for taking the time and being a member of Surge Point Trader.
In the following video, I’m breaking down the supply chain woes that continue to accelerate across this economy.
At some point, the stocks won’t be able to climb anymore and investors are going to take a lot of profits off the table.
Then, there are the oil markets – and I’m breaking those worries down.
Watch the video if you’re serious about making money next week.
The Inflation Trade Heats Up
In March 2021, Federal Reserve Chair Jerome Powell said that the United States didn’t need to worry about inflation. Notice the date at the top.
Six months later, the tune is different. This headline is from Marketwatch this morning…
Inflation isn’t slowing down.
So what do we do now that the Fed has admitted what we already knew?
There are three primary ways to trade inflation.
First is naturally the energy space.
Oil producing companies with strong balance sheets and low levels of debt that own lots of crude. They’ll see a big push in their share price thanks to rising crude.
Second, banks.
The Fed is expected to tackle tapering its balance sheet as soon as next month.
I’ve talked about the community banking space over the last few months. You can buy banks that are trading under a price-to-tangible book (P/TBV) of 1.
Then, you just wait.
Finally, you can combine basic materials producers (palladium, platinum, and silver) with emerging markets. I’m warming up to the metals producers that have cheap buyout metrics and low PE ratios.
That seems like the next move for institutional capital looking for a way to manage their cash in the months ahead.
Positions in Play
We’re still holding onto ICICI Bank (NASDAQ:IBN) and Skechers (NASDAQ:SKX). I offered my insights in the video, and I’m expecting these stocks to keep moving higher in the weeks ahead thanks to strong institutional inflows.
Recently, we’ve added Brink’s Company (NYSE:BCO) as a play. The stock is off again today, and we’re looking for a positive reversal. Ahead of the holiday season, we’re facing a lot of Americans sitting on a lot of cash.
Of course, we’re eyeing BCO stock and expecting a strong forecast when the company reports earnings next week. I’ll be back with more insight into that trade as we progress.
Finally, we had some swings with American Axle (NASDAQ:AXL).
If you haven’t sold your November 19, 2021 $9.00 call in American Axle (AXL) (AXL211119C00009000) do so at the best price possible.
Currently, the bid-ask spread is between $1.45 and $1.60.
A trade at the $1.50 range would generate about a 50% return. We’ll take action today.
We’re still holding the stock, and will exit on Monday if it trails lower.
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.
In the following video, I provide a recap of our portfolio and discuss the biggest bull market in the history of the energy sector.
This week, JPMorgan Chase predicted again that oil prices could hit $200 in the coming years.
Given the ongoing supply chain crunch, rising geopolitical tensions, OPEC’s reluctance to ramp up production, and many other factors, we certainly could see a swell of oil prices.
Even if we get to $100 or $120 per barrel from the current levels of $80, there’s a lot of money to be made.
If this year’s energy markets are any indication, oil prices could be the next shoe to drop.
We’ve seen natural gas, liquefied natural gas, uranium, and coal prices all push to record territory. So, it makes sense that oil prices follow suit.
The result would be a pretty tricky economy for everyone.
Remember that oil is in everything. It’s not just the commodity behind the gasoline in your tank.
Oil is in plastics, carpet, even your clothing. So, any uptick in crude oil prices will affect the consumer and business economy.
The expectation is that the consumer discretionary industry will struggle due to rising oil prices.
Meanwhile, we want to see a rotation in capital over to the producers and midstream providers that will see price appreciation due to the increase of oil prices on their balance sheet.
We’ll continue to monitor this trend and look to profit as a result.
Exiting on PTSI
As I noted in my video, we have to follow rules. So, we did experience a trailing stop trigger on P.A.M. Transportation (NASDAQ:PTSI).
We’ll sell today and take the gains. I’ll send another alert out in a little while to discuss.
We Have Three New Positions
I also explain that we have three new positions that we entered this week.
We are trading Skechers (NYSE:SKX) – which is the subject of my latest report, October Reversion. With this stock in oversold territory, I argue that now is the time to trade it.
Shares have pulled back over the last month, and I like a rebound heading into the fall toward the holiday season.
We’re taking advantage of the holiday supply chain crunch with Atlas Air Worldwide (NASDAQ:AAWW), a major investment by hedge fund manager Bill Ackman.
I think that this stock has an upside target of about $100 and will continue to provide investors with significant gains in the future.
Finally, we’re trading a reversion in American Axle & Manufacturing (NYSE:AXL). Shares popped about 3.8% on Friday, and our options trade is climbing.
We want to see this stock get back above $10 before we take our gains off the table.
Thanks for Joining
I want to extend a warm welcome to new subscribers after this week’s event.
I’m delighted to have you be a part of this experience, and I look forward to the chance to make you money.
Next week, earnings season will be in full swing. As I warn in the video, be cautious about supply chain factors.
We could see many selloffs across the retail industry in the weeks ahead.
We’ll instead look to capitalize on financial and energy stocks.
I always invite your feedback. Please shoot me a note at
It has been a quiet week for trading, and the reasons are pretty obvious.
If you saw Tuesday’s sharp rise in volatility and listened to me talk about negative momentum on Thursday, you know I’m going to manage my risk and hold cash.
I know there is a deep desire to actively trade, but putting September behind us was important.
Now comes the real storm.
Yesterday, multiple global freight shipping companies announced that the international supply chains are under extreme duress. I’m serious when I say that people should buy their Christmas presents now and get paper supplies by mid-month.
Freight costs have gone up seven-fold from China to the United States on some lines. Costco is renting its own ships. Nike and McCormick – despite high demand – can’t get products across the seas.
We’re going to take advantage of Atlas Air Worldwide (AAWW) on Monday. I don’t want to enter a position and hold it over the weekend after the recent downturns to start the week.
We’re also going to be moving on Skechers (SKX), which looks like the breakdown is going to come to an end very soon.
I discuss this and more in my video below. I also offer an update on the current portfolio and how we plan to start deploying cash.
After that nasty downturn in momentum last Friday, we had to take a few companies off the board. But we’re primed for two new trades (including the bonus trade that I laid out earlier today).
As I noted, Evergrande in China lurks as a very ugly domino in the global economy. My concern is that there will not be a structural solution, and we’ll continue to see Band-Aids applied.
It doesn’t instill much confidence that a company that makes $5 billion a year in profits has $300 billion in liabilities. That latter figure is 2% of China’s GDP.
I’ve heard some people say that it won’t spread to the U.S. I don’t agree with this assessment fully. Chinese citizens invest in a lot of real estate in places like Northern California and New York. Any run on capital due to falling prices in China would impact larger U.S. markets.
I have learned from multiple major events to ignore the people in charge at the onset. The head of the European Central Bank said that Europe has very little exposure. I openly laughed at this interview.
As I said this week, I’m watching Australia. If we do experience any serious macroeconomic problems, it will start there. The commodity space has seen some insane moves over the last year, and it appears that the combination of supply chain shocks and labor shortages will persist.
The reason why I didn’t move on shorting the nation was because of the rebound in commodity prices on Tuesday.
So, we have to be patient.
My expectation is that the market will continue to experience a ladder pattern during the week. Some selloffs on Monday, gains for the next three days, and then a Friday downturn.
We have a lot of work to do.
The good news is that momentum remains very strong in the supply chains. Our PSTI position continues to run, and I will use any selloffs moving forward to recommend purchases in global shipping container companies.
The supply chain crunch we are about to experience (get your toilet paper and holiday gifts right now) is going to be as significant as what we saw in 2020, if not more significant.
With S&P 500 momentum volume moving positive again today, we need to actively manage our portfolio.
You’ll notice that it was quiet this week.
With great uncertainty in the market and inflation numbers hitting nosebleed levels, it’s unclear which way the money wants to flow.
Six banks issued dire warnings around the market this week, and the talking heads are screaming about blood in the water.
I’m being cautious until Monday. I want to see where futures start next week before making any sudden moves.
With that in mind, we have a number of winning positions, and our focus on reversion momentum in these choppy conditions is paying off.
Let’s take a look at the portfolio and recent moves.
Zynga (ZNGA)
We exited ZNGA this week when it hit its trailing stop of $8.50. We made a gain on the stock, and we had two nice legs on our options trades. We’ll be ready to deploy capital next week.
Gaming & Leisure Properties (GLPI)
Rival VICI Properties engaged in a stock issuance to fund a new project, and pulled the rest of the sector down with it. This is extremely frustrating. The good news is that the stock has moved into oversold territory, and now we look for investors to scoop it up on the cheap. We will hold this position. I expect it to claw back to the $50 range where the 200-day moving average sits.
Levi Strauss (LEVI)
This is a legacy trade from our original portfolio, and the company can’t seem to catch a break. The big, negative news around the huge jump in supply chain inflation isn’t positive news right now. We will give this one more week to rebound. Otherwise, we’ll have to cut the dead weight.
PAM Transport (PTSI)
PTSI continues to chug along in positive momentum conditions. Shares opened north of $40 today. Based on the recent move up to $40.42, your new trailing stop is $37.59. It’s very important to follow these rules. That will ensure at least a 12.5% gain from our original entry price.
TrueCar (TRUE)
TrueCar moved very close to our trailing 7% trailing stop of $4.00, but it has since bounced back and is now tracking north of $4.27. Our option is flat right now at $0.40, but the momentum is surging higher for this stock. I think that $5.00 is still in the cards. If you’re just buying it, be sure to keep that trailing stop in place. Be patient.
Co-Diagnostics (CODX)
The volatile diagnostic company might be weighing on our patients, but it’s still in play. There’s a move to $12.50 coming, and we’ll be happy to take our profits if we get above $11.75.
ARES Management (ARES)
The stock has moved out of overbought conditions into oversold conditions. Morgan Stanley just upgraded the financial power player to $90, but would be a nice gain. I’m looking for institutional capital to show up and push this higher.
Cameco Corporation (CCJ)
The uranium player has been an emotional rollercoaster over the last 48 hours, but a 4.2% move this morning has the stock up to around $24 per share. Can it go higher? It could break to $30 by the end of the month if this surge in uranium prices continues. As I explained in the video, Sprott Management is buying up supply, and CCJ is going to be the big winner.
We’ve bought the stock and taken a tight trailing stop. We also bought the Oct. 15, 2021 $22 call for under $1.50.
This afternoon, I recommended that you take 50% of the position off the table. By securing more than 100% gain on your first half of the trade, you’ve locked in a free trade. In fact, since the return is likely higher than 100%, you’ve locked in a guaranteed win. But we will manage this actively. If the stock pulls back, we can take the rest of the gain, but given this incredible momentum, I think there’s plenty of room to run.
Terminix Holdings (TMX)
Speaking of gains, TMX is running as well. After that double upgrade by Bank of America, this continues to perform. I recommended TMX when it was trading around $42.30. It’s now north of $45.70. That’s an 8% move in a week, and that’s a great reversion momentum trade.
Now, we also tagged that Feb. 22, 2022 $40 call at $4.50 or better. The Bid-Ask spread puts the contract around $7.00. That’s about 55% on a contract that hasn’t seen a lot of volume. If you got into this trade, you’ll want to manage this closely. I’ll monitor it as well. It may be time to take profits off the table if the stock hits $46.00 and move onto the next trade with money in your pocket.
Below is a recap video of our portfolio and two new trades to get moving on momentum.
There are several factors pushing capital back into the markets. Among them is the breakthrough of the 4,500 level on the S&P 500.
That psychological barrier was a major milestone for the markets and immediately kicked off speculation about hitting the – GET THIS – 5,000 level by the end of next year.
Money’s going to run. I won’t complain because the more money that moves in the market (and there are trillions on the sideline), the better we’ll see our strategy work.
Now, a quick update on the state of the portfolio.
We exited the Zynga options trade at gains of 108% on our first leg and another 77% on the second leg. I hope that your trades were even better based on your entry price.
But Zynga stock continues to run. We are holding a $8.50 trailing stop at the moment. This stock could continue to breakout in the next week.
A holdover from our original portfolio, this position has paid off. Our entry price was measured at $2.66 on the October 15, 2021 $45 call. That contract is currently north of $6.00.
We’re going to let this run a little while longer. If the stock pulls back to $50, we will take profits off the table.
Our LEVI October 15, 2021 $27 call has taken on water. This was from the original portfolio that has struggled to attract capital due to the delta variant and ongoing worries about consumer goods.
I’m monitoring this position closely and we’ll take it off the table by mid-September if we don’t see any level of improvement.
We entered this position at $33.40 on Aug. 24, and we’ve seen about a 9.3% run on the stock. I expect the company will continue to run as higher freight costs and competitive advantages pay off in the fall.
I think the stock can easily go to $40 in the weeks ahead. Keep that trailing stop at 7% right now, which would be an exit at $33.96.
TrueCar has been signing partnership agreements with credit unions and other financial institutions heading into the fall.
This could be a very positive catalyst for the stock as it aims to rebound off recent weakness. We’re looking for that to pull the stock back to recent highs.
I still rate the stock a buy and recommend the Oct. 15, 2021 $4.00 (TRUE211015C00004000) call if it is trading under $0.40.
Our diagnostics stock continues to whipsaw and looks for a breakout above that $11.20 resistance level. Right now, we are being patient.
As students return to school and the emphasis centers on testing and not shutdowns, I’m expecting a solid quarter for the company. We will continue to hold our position.
This best-in-class private equity giant has been on a solid run over the last month. We’re looking for this stock to move quickly toward the $85 to $90 level in the weeks ahead.
Strong institutional buying continues to flood this firm. With money pouring off the sidelines after the S&P 500 hit 4,500, this is a very good time for alternative investment managers.
The stock is rated a buy. If you are buying the stock, set a 7% trailing stop on your position. For example, if you pay $80.00 for a share, your trailing stop would be $74.40.
As I noted in the video, Sprott Management has made huge purchases in uranium on the spot market. As a result, the price of uranium has been soaring.
This was a bonus pick today, and it carries a more speculative flair to it. But it is possible that in the week ahead, we will see a lot of investors chase Cameco (the largest publicly traded uranium company) higher.
We’ve bought the stock and taken a tight trailing stop. We are also speculating on the Oct. 15, 2021 $22 call for under $1.50. I’m very excited about this position.
As I’ve noted, I’m looking for another trade today as we head into the afternoon session.
I’ll also be back with a watchlist for you on Tuesday morning. I hope that you all have a wonderful Labor Day weekend.
Action to Take: Raise Your Zynga Trailing Stop to $8.70Market Price
Dear Fellow Investor,
Travel has sent me on a walkabout in Baltimore.
I waited a little bit to send you this write up for the most obvious reason.
Federal Reserve Chairman Jerome Powell delivered his speech from the virtual Jackson Hole symposium. Naturally, this day was make-or-break for speculators. Would the Fed start its tapering and bomb the market immediately?
Or would it delay its policy decisions?
Knowing the Fed, you really didn’t need to guess. They have kicked the can down the road just a little bit. Powell said that the central bank still has a lot of work to get done. That’s an understatement considering the damage they have created over the last decade.
The Fed’s balance sheet has been a massive source of optimism and speculation over the last few years. It has allowed unprofitable company’s stocks to rally, while good businesses with profits and strong fundamentals lag the market. Basically, the Fed turned the entire market on its side back in 2003 and never looked back.
It’s always fun when the Fed says that there isn’t much inflation in the economy, yet fails to understand how its policies have fueled asset bubbles for 20 years.
Oh well. I guess the best we can do is just play the new game.
And that’s what we’ve been doing.
Zynga Inc. (ZNGA)
This week, we took profits off our Zynga options trade. After locking in near 100% gains of the first leg of the stock, we took the remainder off at a smaller gain in the 60% range. I’m content with this. I know that Zynga has rebounded since its recent pullback. However, I’d prefer to protect gains than risk any breakdown.
The other day, I witnessed selling of calls at the $9 range for October in very large blocks. To me, this felt like a large institution setting a line in the sand on the stock for the next two weeks. So, I was happy to rotate out of this company and move into another options trade that looks like it’s ready to bounce in TrueCar.
Meanwhile, we continue to hold the underlying Zynga stock. With shares trading north of $9, we are fortunate enough now to raise our trailing stop to $8.50. I might look to protect even more of these gains if we can.
Co-Diagnostics (CODX)
Another week, another climb above $11 for this diagnostic stock. It feels like this is ready to break resistance and get back to $14 in the near term. That said, we are happy to hold this stock and enjoy our gains so far. If you’re just buying into the stock, remember this can be a bit volatile. That’s why we’re sitting on a stop down around $9.50.
Let’s continue to enjoy the ride.
TrueCar (TRUE)
TrueCar announced the fourth straight month of slowing vehicle sales. But that was a headline. What people need to understand is that there remains a severe shortage of vehicles. So, the company broke even on earnings, but the stock sank quickly. I think that this was in oversold territory last week, and we’re looking for investors to start picking up pennies.
The stock is up another 2.6% on Friday. This looks like a nice cool burn back toward $5. The $4 call for October is still where we recommended it. And we need to see a move above about $4.25 in the underlying shares before this position starts to run.
The good news is that I have a $5 price target in this stock for late September. Buy the stock, and hold that 7% trailing stop.
P.A.M. Transportation Systems
We’re combining strong price trends with a more illiquid stock. That can drive big moves on price in a short period of time. I still like the flatbed trucking industry heading into the fall. More important, I like the fact that the stock is about to split, the company is going to increase its dividend, and it has plans to buy back more than 200,000 shares for more than the current price. I think this stock is about to surge in September.
Let’s ride that truck into the profit station.
I’ll be back on Monday with a full watchlist.
For now, I need to go watch some horses run in a circle.
