Liz here, sad that my new husband will be spending Christmas Day in jail. (He works there, but I like freaking people out.)

To distract myself, I will be going to Mistletoe Mania tonight – make sure you put it on your calendar right here.

The hours at jail are truly horrific – the county is understaffed by about 1/3, so the officers have to work about three double shifts a week right now. However, the pay’s great, the uniforms are hot (hellloo, dark blue with brass badges) and at least my husband does come home with some great stories.

I remember sitting across from him on our first date and saying “TELL ME STORIES ABOUT JAIL” and now — this is my life. STORIES ABOUT JAIL.

Aside from the more exotic tales (like the guys that carved out an escape tunnel in a concrete wall using only their toothbrushes), there seem to be a lot of bloody fights over bread and cookies. (They had a full scale, National Guard level riot over someone not liking their oatmeal last year.)

There are apparently these lemon sandwich cookies there that the inmates hoard and trade like street drugs. Every story I hear about these, I get more and more curious to taste them. My husband said he would bring one home from the facility for me sometime. CONTRABAND.

ANYWAY, when I asked CJ for a new play last night and he started off with a couple of water companies and then pivoted to a bread company as his main play, I immediately shrieked “JAIL FOOD.”

CJ’s Bread Play, Plus A Little Water to Wet Your Whistle

Years before jail became MY LIFE, I visited the Tower of London and got to see various implements of torture that now look suspiciously like things you pay to have done to you at physical therapy.

I also supposedly saw the crown jewels, but MATT, the gentleman I was with, told me that the crown jewels they display there are just facsimiles. “You think they’d actually put the real jewels right there?” Thanks for ruining my life, MATT.

Here I am at the Tower of London – proving to you that I have seen firsthand a place where prisoners really did eat nothing but bread and water.

CJ’s “freebie” water plays are American Water Works Company Inc

(NYSE: AWK) and York Water Co (NASDAQ: YORW), so do with those what you will. “But I found something better with my short squeeze filter,” he said.

That would be Flowers Foods, Inc. (NYSE: FLO), a $5.7B packaged bread company operating out of Georgia, which runs 47 bakeries in various states, oh yes, and is the proud owner of Tastykake. (My late father-in-law from my first marriage, a Tastykake fanatic, is no doubt one of the reasons they were recently able to raise their dividend 5%).

This is just one of those unsexy stocks it makes sense to own long-term, because, hello, bread. (I’m actually curious to get Tim Melvin’s take on this one.)

CJ says, “Nothing is Pandemic proof, but FLO shares took a couple of weeks to come back from its pandemic slump while the rest of the market took months. We all eat bread. Even prisoners in ‘the hole’ get it.”

(This is the point in the conversation where I shrieked “JAIL FOOD.”)

As you can see, during the pandemic, we all just kept right on munching away at our Tastykakes…barring a couple of weeks where we were just too shell-shocked to do anything but watch state governors livestream. (I still hear Larry Hogan saying “Wear the damn mask” in my dreams.)


CJ sent me a whole writeup on bread, so I’ll let him take it from this point on. Here he is:

According to the interweb, we all started making our own bread at home when the pandemic times hit last year, right? OK, I’ll admit, I may or may not have a vessel of “starter” in the back of my fridge, but I also know that I pick up a loaf of bread EVERY time I go to the store.

It’s almost a sickness, but it also reminds me of why I like this stock… FLO.

They make bread, the kind I eat every day, the kind you eat whether the economy is booming or busting, and I want their stock just as badly as my morning samich.

This stock has the makings of a long-term winner with the monthly chart breaking into a volatility storm. You don’t see these too often, but I’m taking note. This is the beginning of a longer-term trend to the upside that should have some speed behind it.

More recently (Monday), the stock dropped as the market took on a rampage of selling, ducking a break to new highs. That’s right, this stock is breaking to new highs while the rest of the market is seeing red…. That’s a relative strength leader when it counts.

The pullback gets the stock ready to break towards its top Bollinger Band. More recent breaks above this volatility trigger have resulted in about a 7% move in the matter of less than a few weeks.

The shorts? They don’t like it… and it’s going to end up costing them when they have to buy shares back at my target of $30 pretty soon.

That’s another reason that I like it, the pending short squeeze that will push prices higher. The most recent short interest shows that the shorts added 6% to their bearish bets.

Go With the FLO for the Short-Term…And Stay For The Long-Term

All of this adds up to a short squeeze that is likely to drive the prices well above my $30 target. Here’s how you can trade it:

Buy-and-holders: Buy shares of FLO for market (around $27.10). Use a 7% trailing stop (hint, that would take you below its recent lows at $25.25).

That’ll be Nickel Slots. Here’s what to do:

NICKEL SLOTS

Action to Take:

Buy shares of Flowers Foods, Inc. (NYSE: FLO) at market. Use a 7% trailing stop.

Leverage the move? Yes please…

We’ve actually got one more Nickel and one Dollar Slots here – a slightly more expensive short-term play, and a cheap, cheap longer-term call. You know what kind of gambler you are.

Here’s what to do for the short-term:

DOLLAR SLOTS

Action to Take:

BUY to OPEN the FLO January 21, 2022 $25.00 calls for $2.40 or better.

Enter as a GTC (Good-til-Canceled) order.

Want to leverage the long-term? Yup… buy July calls (no LEAPS here or we would be eyeing them).

Here’s what to do:

NICKEL SLOTS #2

Action to Take:

BUY to OPEN the FLO July 15, 2022 $30.00 calls for $0.85 or better.

Enter as a GTC (Good-til-Canceled) order.

Liz here again (as always, I took over seamlessly during the trade part. I’m getting SO good at this.)

This week we have a bit of a truncated trading week – in fact, I’m bumping Money Calendar Friday to tomorrow morning, so you’ll get your weekly dose of large, liquid ETFs before Santa gets here.

I’ll also have some other goodies for you, so stay tuned…

Some illicit lemon sandwich cookies, perhaps…

Actually, scratch that, I’m baking real Christmas cookies this year, and possibly a buche de Noel (Christmas log), which I will send you pictures of, but which you, as always, may not have.

Oh, and watch out for some Flash Trade updates, too.

Hang loose!

Liz

P.S. Put Mistletoe Mania on your calendar! YOUR TIME IS RUNNING OUT!

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