Tyson Foods Is Off The Farm

Andrew Giovinazzi

Yo Pit Crazies,

For now, long is wrong.

Unless you own shares of Tyson Foods, Inc. (Ticker: TSN) or the Proshares Ultra Short Term VIX futures ETF (Ticker: UVXY).

And, funny enough, bonds are staging a rally, so iShares Barclays 20+ Year Gov Bond ETF (Ticker: TLT) is rallying, too.

Money wants Volatility, Chickens and Pork with bonds.

Sounds like a recessionary menu.

Somehow, the Recovery Trade Went Awry

A lot of 2021 was simply banking on the recovery trade from COVID-19.

Folks would get the shot and would go back to work but it is not working out that way.

To be honest, nothing is really going right:

Mortgage rates up 200 basis points to over 5% for a 30-year fixed
Supply chain issues still abound
Inflation is at a 40-year high
China is still fighting last year’s COVID battle
The US Economy slumped to a 1.4% contraction, with record high unemployment
The Russians are not leaving Ukraine anytime soon

So all this is a recipe for what?

I think everyone that piled into US Gov bonds are out by now after getting surprised by the Fed. Money is only going to high-quality stocks with low multiples like TSN, which trades at a crazy 9x backward earnings.

Six-month TSN chart with one-day candles.

Trade Flavor

TSN could make a run post earnings and $100 is a nice round number.

TLT had its first green day in forever and a cheap upside call spread would make a nice pair with TSN.

Most of the go-go growth names of 2021 are dead in the water (like Palantir Technologies Inc (Ticker: PLTR)).

For now, quality like TSN will rule.

The Rundown

Option Shopper

Licia Leslie went shopping and pulled out 73% return on passel of puts in Delta Air lines Inc (Ticker: DAL)

Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session.

Richard got into a next level stangle ONCE AGAIN, this time riding UVXY up: