KT 90 said:

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gougler08 said:

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Market is bumping but apparently the money is all flowing in stocks outside of my portfolio today

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yeah, a lot of board favorite small cap stocks seem to be missing out on the Santa rally.

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Because the money is flowing into beta stocks. People aren't going to dump money into speculation when the blue bloods are all ripping

Why do you guys even bother with F16?

I was the poster here who told you all to ignore the people saying treasury rates were going to spike. I even told you the ceiling on the 10 year was 1.6%. I was right. Even with the FED signaling three short term interest rate hikes in 2022, I still am here to tell you that long term rates aren't going anywhere substantially.

Rick Santelli, the Treasury bond expert for CNBC, said in a recent video hit that the 10 year will not rise substantially until the FED's reverse repo market starts to shrink, and banks begin to eat into their available, lendable cash. That is, until banks begin to lend out all the deposits they have captured during the pandemic. How much is in the reverse repo market? $1.6 Trillion. I'm a banker, our deposits have gone through the roof since Covid began. We are trying to lend out as much as we can, but liquidity keeps growing despite our best efforts.

How do we capitalize on this as investors?

1. Tech valuations have been hit the latter half of this year due to the fear that they won't be able to borrow at depressed rates for much longer. I'm here to tell you they will be able to price their bonds cheaply for at least the next 12 months, and likely longer.
2. Home builders and mortgage banks have had their valuations hit as the consensus is there will be higher mortgage rates. Not with the 10 year still below 1.5%. Until the 10 year Bond goes above, and stays above 2.0%, there will not be financial impact to the mortgage banks and the homebuilders.

So look to your lottos that may be able to capitalize on undervalued tech, mortgage banks, and homebuilders.

Bonfire 1996

I'm not Rick Santelli, but here's my post from 11/22 down below. I'm glad you posted Rick's thoughts. I had not heard/read them. Makes me feel better. And thank you for your post!

TexAgs....we know things..

Quote:

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-Fed is buying $120 billion per month.
-The reduction is $15 billion per month or 8 months.
-The $15 billion breaks out into $10 billion Treasuries and $5 billion in mortgaged back securities.
-The ball to watch is that TRILLION dollars plus the banks gave back to the Fed sitting in the New York Repo. That's another 8 months of funds of propping...$Trillion/$120 billion.
-Depending on how the banks re-enter mortgage and other lending segments - could be a squeeze play. Banks are suppose to re-enter these areas, mortgages and other lending, and get the Fed out; hence, dollars flooded the system months ago for banks to lend but they gave it back (lent) to the Fed until later when they(banks) want/need it.. If you been paying attention to the bank that was the poster boy of "bad", Wells Fargo, you'll remember they ditched personal lines of credit and other risky ventures back in July, got their mortgage and loan portfolio in order and still somewhat an ongoing process. Wells is moving quickly at getting their house in order. (In order for what?) I'm watching these guys because I think their actions are signaling when the Fed will actually pull out and banks resume what they are suppose to be doing.

TLDR - Stock Market may pullback some...like to SP 3800 to 4200 where the big banks said it would be at year end. I think that's a "maybe". I don't see a major correction. Too much money still in the monetary pipeline policy to keep things as-is for months,....mathematically 16+ months more.

My 2 cents.

Now, regarding the other stuff. If somebody starts firing rockets, I guess we'll fire rockets back..?

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I'm bulled up, but I think we see market weakness in March....as it's kind of a seasonal thing for me.

BaylorSpineGuy said:

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Can someone with some IT background give me opinion on CCSI? It's a company that does some digital cloud and blockchain-type technology. I think I like what this company is trying to do, but just trying to figure if it's gonna be a good investment or not.

Any help would be appreciated. It's a fairly new ticker (last few months), but I think it broke off from a company that has been around 25 yrs or more.

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Dethroning DocuSign would be hard.

Back on 12/17 I bought a 12/31 SPX 4775/4800/4825c fly for $1.40 due to the huge OI on 4800c.

The first few days it looked like a waste but it has obviously perked up over the past week. To try to lock in some profit while still keeping the trade open I'm trying to roll the 4775 to 4780 and the 4825 to 4820 for $2.00 credit. This would leave me with a 4780/4800/4820 net free+ fly for Friday expiry.

Farmer @ Johnsongrass, TX said:

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Bonfire 1996

I'm not Rick Santelli, but here's my post from 11/22 down below. I'm glad you posted Rick's thoughts. I had not heard/read them. Makes me feel better. And thank you for your post!

TexAgs....we know things..

Quote:

---

-Fed is buying $120 billion per month.
-The reduction is $15 billion per month or 8 months.
-The $15 billion breaks out into $10 billion Treasuries and $5 billion in mortgaged back securities.
-The ball to watch is that TRILLION dollars plus the banks gave back to the Fed sitting in the New York Repo. That's another 8 months of funds of propping...$Trillion/$120 billion.
-Depending on how the banks re-enter mortgage and other lending segments - could be a squeeze play. Banks are suppose to re-enter these areas, mortgages and other lending, and get the Fed out; hence, dollars flooded the system months ago for banks to lend but they gave it back (lent) to the Fed until later when they(banks) want/need it.. If you been paying attention to the bank that was the poster boy of "bad", Wells Fargo, you'll remember they ditched personal lines of credit and other risky ventures back in July, got their mortgage and loan portfolio in order and still somewhat an ongoing process. Wells is moving quickly at getting their house in order. (In order for what?) I'm watching these guys because I think their actions are signaling when the Fed will actually pull out and banks resume what they are suppose to be doing.

TLDR - Stock Market may pullback some...like to SP 3800 to 4200 where the big banks said it would be at year end. I think that's a "maybe". I don't see a major correction. Too much money still in the monetary pipeline policy to keep things as-is for months,....mathematically 16+ months more.

My 2 cents.

Now, regarding the other stuff. If somebody starts firing rockets, I guess we'll fire rockets back..?

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I'm bulled up, but I think we see market weakness in March....as it's kind of a seasonal thing for me.

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This is excellent. With the FED now tapering at $30 Billion per month, we can actually watch the repo market shrink. Or so we think.

I wonder how many hundreds of billions per year the baby boomers are being forced to turn into cash for Required Minimum Distributions? Being a banker I see this often, and I have boomer parents. They are forced to sell and it goes into their bank account. It's not deployed to risky assets, it sits in cash. That will slow the effect of tapering on the repo market.

Morning

Volumes are significantly lower today as London is closed for a holiday... Nonetheless, S+P futures continue to rock.... Since 3 am they have moved up 20 points... And since the opening of last Tuesday, they have SKYROCKETED 240 points.... Not bad for one week... We said the Christmas rally would happen after the Fed meeting, but it took until December 21 to kick in... Not everyone is benefiting...with the S+P up 28% YTD, Cathy Wood's ARKK fund is down 22% YTD... And according to BB, is seeing significant out flows... Clearly we are setting up for a correction in 2022, some compare it to 1999, we doubt that, but still see a problem by the end of the first quarter... But for now, " party like its 1999"... FYI, volumes are low... With only 85,000 S+P contracts trading so far this am... 898,000 traded yesterday where a normal day is over 2 million

Bonds look to trade defensively... 5 year auction today... Again on low volumes... With London closed only about 30% of the normal volume is going through... We think treasury ranges should hold for today 10 years 1.52 to 1.43 and probably more like 1.47 to 1.49... 5 year should come inside of 1.30... New 2 year is .75, not surprising given the massive repo short in the current 2 year...

Economic news... Japan's Industrial Production soared the highest since 1978, up 7.2%, which indicated a GDP of over 5%... China did a small operation to shore up liquidity... There is some housing data today... But economic numbers are not what is moving markets... Window dressing and the huge amount of hedged positions from early December are being reversed... This could go on into January...Personally, we think taking some profits makes sense, but we think the move will go further...

Corporate bonds... Volumes are lower but spreads are like a rock...CDX IG hovers around .48 and CDX HY, at 287, well within the recent ranges of 275-300... We are seeing some clients looking for bids for esoteric bonds before year end, but they are being faced with a lack of buyers at bulging spreads... That is not uncommon for year end... That's it for now, if we missed anything let us know...

Can someone tell Santa to include the small caps?????????

Unfortunately the rules leave room for interpretation, but this is the exact kind of thing that most say you should NOT be doing. Selling an ITM put is pretty much a long stock equivalent.