Tom Lee isn't exactly known for timid predictions, but his latest call might be his boldest yet. Speaking on CNBC's Squawk Box on Monday, the Fundstrat co-founder laid out a case for the S&P 500 hitting 7200-7300 by December. Not maybe. Not if things go well. "Likely," he said. And just to make sure everyone understood where he stands: "I'm pretty bullish."

This is the kind of forecast that gets people talking. After all, sentiment feels tired, the rally seems old, and plenty of investors are nursing losses from November's pullback. So what does Lee see that others don't?

The Liquidity Surge Nobody's Pricing In

Lee's conviction boils down to three things: liquidity, capitulation, and timing. The biggest catalyst, he argues, is happening right now. "Today is the day that QT ends," he said, referring to the Federal Reserve's quantitative tightening program. After nearly three years of draining liquidity from the system, the Fed is hitting pause. Combined with expected rate cuts this month, Lee thinks the liquidity floodgates are about to open.

History offers a compelling parallel. When QT paused back in 2019, markets rallied 17% within three weeks. If something similar happens now, the beneficiaries would be the usual suspects: SPDR S&P 500 ETF (SPY), iShares S&P 500 ETF (IVV), and Vanguard S&P 500 ETF (VOO). These are the vehicles institutional money managers pile into when they need broad market exposure in a hurry.

Performance Panic Could Light the Fuse

Here's where Lee's argument gets interesting. November wasn't fun for most investors. The market dropped 6%, and AI stocks along with high-beta names got hammered even harder. According to Lee, many fund managers basically gave up, expecting to limp into January and start fresh.

But what if December doesn't cooperate with that plan? If the market starts ripping higher, those same managers face a different problem: career risk. Nobody wants to explain to clients why they sat out a year-end rally. That fear creates what Lee calls "performance chasing," the kind that produces sharp, face-ripping moves in broad-market ETFs as institutions scramble to avoid underperformance.

There's one potential wrench in the works, though. Lee warned that "the bond market will protest if the Fed is too dovish." In other words, the Fed needs to thread the needle between supporting growth and not spooking fixed-income investors.

Investor takeaway: The bears think November's selloff marked the end of the rally. Lee thinks it was just a shakeout before the real move begins, and his target is well above where most investors are positioned.