iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
20,344 Blog Posts

Markets Rip Higher — Now +20% the Past 3 Days

I started off the day selling my losers from the day before, letting my winners move. By mid-morning, I took extreme profits and felt really good. Then I got greedy and tried to dip back into the well and ended up stopping out of several of the stocks I thought would move.

The results.

(JWN -7.9%)
(SPG -7.3%)
(MAC -7.3%)
(VER -4.8%)

STWD +40%
PEB +13%
MTG +14%
IVR +53%
NYMT +30%
CMO +11.7%
EPR +8.3%
ABR +10%

(SKT -4.4%)
(WMC -15%)
(ARI -10%)
TRTX – wash
(BXMT -8.6%)

Net net, a big day for me and I still have some stocks up on my books. It could’ve been better, but that’s how it works. Going back to the well is never a good thing. Towards the end of the day I went long some infrastructure plays and auto-parts. I also own mortgage plays, because CMBS is being purchased by the Fed now with infinite cash hacks. Closing out the day, 45% cash with a bias towards going higher. It seems unbelievable, but you’re gonna hear people talking about ‘normalization’ of prices, which means high prices for just about anything. I might fade the opening rip tomorrow, so stay tuned.

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41 comments

  1. narcist

    Sustainable pace? Very doubtful.

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  2. it is showtime

    Die Walküre, Ride of The Valkyries

    youtube.com/watch?v=myjCHbjM0MA

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  3. alty

    Easiest bear ever, right guys?

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    • edge

      Yes. It let you know when it wanted to go down, and now you know it wants to go up.

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    • numbersgame

      “I also simultaneously beleive that the market will likely bottom today…If it doesn’t bottom today (for at least a long time), then it basically never will…So if the issue *really* is liquidity, and not that assets such as bonds are overpriced, then the problem should be solved by (the FED’s) action today.”
      – Numbersgame, the on Monday

      https://ibankcoin.com/flyblog/2020/03/23/market-gets-boost-fed-launches-main-street-facilities/#comment-568479

      I also note that unlike others, I had not called a bootm in March before.

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      • heckler

        Oh shit I’m calling for new lows numbers!!

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        • heckler

          Wanna bet bitch?

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        • numbersgame

          Note “*really*”, read my full original comment.

          I have a view on how long the rally lasts (and why), and have several calendar spreads based on this view.

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          • awanka

            Thanks for this bottom call. I followed you on it and made a good chunk of money. I didn’t say anything at the time because I didn’t think it would be fair to put that sort of burden on you.

            I see a lot of smart people saying this is probably a bear market rally. What do you think?

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          • numbersgame

            Because you asked nicely:

            On Monday, I also said that we would end the week higher (the longest March rally so far), which it looks likes we will still do. However, the rapid pace of this rally (+20% in 3 days, the fastest since the Great Depression) has put the length of this rally in doubt.

            Bullish:
            The Funds want to post good numbers for their clients End of Quarter, so that would imply strong support through the end of March, and then a decline starting April 1.

            Bearish:
            Recall that when the US only had ~7000 cases, I posted that we would surpass China in (officially-confirmed) cases. That was on 3/18. Now it is clear we will pass 100,000 cases over the weekend: scary number, but perhaps not a total market shock at this point. However, the fact is that we are NOT slowing down yet. Not only will the US pass 100,000 soon, but we will hit ***200,000*** next week. I myself even find this hard to believe, but the numbers don’t lie and any kind of late deceleration in cases would only affect *when* next week, not if. I do not think the market has priced in this number at all (as I said, it even surprises me).

            Even though his medical staff is telling him otherwise, Trump’s belief in himself over the experts and his instinct that lying to the market optimistically is better than the truth has enhanced this market view. However, the reality is that “15 days to blah, blah” will be extended over the weekend. That and the rapidly increasing 6-digit numbers (looking for +20,000 case day nexte week as well), mean that the next decline may not even wait unitl April.

            I also said that what makes this virus scary to powerful people is that money can’t save you.
            Towards that end, that Heir to the British throne (Prince Charles) was diagnosed with COVID-19 eaelier this week. Now, PM Boris Johnson has it. More fear.

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      • edge

        Liquidity and then some.
        Repos through April: 4.5t
        Direct fed lending: 4.5t
        Individuals and small businesses: 2t.
        A half of a year’s worth of GDP.
        Thank this for the rally. Do a repo with cheap interest and buy Boeing, the bubble lives.
        Nothing has changed.

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        • heckler

          You’re probably pretty right. I want to open a fuck you short on something but we probably stall out for a while now

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        • edge

          Heckler, they’ll print and spend as much as necessary forever. The limit is collapse. Theoretically the governments’ ability to spend is unlimited, but the practical limits will be found. It could take a while but there is no hope.

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  4. heckler

    The problem with the market now is that we have got overhead supply going back to the end of 2018 and that could take like 6 months or more to work through.

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  5. purdy

    Usually the market would want to jerk around up here – and a bit higher – for a good while in order to inflict some punishment on the half-way-back re-shorters. But if we have people being triaged to death over the next couple weeks… can that happen this time?

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  6. edge

    Maybe. I don’t think there is any limit to the cash that will be spewed. They’ll chuck cash until the bond market revolts.

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    • narcist

      The problem in this particular situation is that the entire planet is falling into a Japanese style liquidity trap.

      The velocity of money is falling fast. And the biggest unknown hinges on how long Madame Rona wants to stick around.

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  7. edge

    This is all you need to know about our economy: government put forever.

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  8. tjnyt

    Proudly, we have the best & the biggest casino in the world.
    A legal, perpetual Ponzi.
    Agony to Ecstacy, mass psychology at work.

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    • heckler

      Yes I heard that- it’s like a painting from the 15th Century these days. Flesh and angony and ecstasy

      How about we short credit cards those bastards make all their money on loans and have gotten away with it for a while

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      • tjnyt

        My only underwater position today was, SPXU & UCO. Taken a lot off the table still long eq.

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    • edge

      We need to quit pretending that this is a free market economy. Just sell the Fed as many bonds as it wants, direct from the Treasury, it will get them anyway. Why do we even have a government? Just let the oligarchs (kleptocrats) appoint a czar.
      Any semblance of a functioning capitalistic democracy is gone. That’s it. We’re a totalitarian state now.

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      • heckler

        Wanna short booking companies? Casinos are still fucked

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        • i_am_nemo

          Gamblers are losing their fucking minds with the casinos shut down. They will be back as in droves 2X as soon as the doors open.

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      • alty

        That escalated quickly.

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  9. heckler

    The other short could be online advertising because so many people own that shit

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    • tjnyt

      Go long on the obligatory double bottom with your fav, 1/3,1/3,1/3 position

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  10. heckler

    And if any of you fags haven’t bought a Bitcoin yet now’s the time

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  11. edge

    Oligarchs: Oh, no! We fucked up! (Again)
    The-bought-and-paid-for-government: How can we help?
    Oligarchs: Same as always. Give us money.
    Bought-and paid-for-government: OK

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