Samwise Quick Reference Handbook
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Sam, If we do end up getting a pullback, I know you said one possibility would be a pullback to the 465 range. If that is the scenario that plays out, how many days would you expect it to take for QQQ to drop from 490 down to 460?
So that’s totally unclear. It could be a sharp sell off or it could just be a slow and steady decline. We can’t know that until the sell-off actually happens.
There is some indication/risk right now that the market environment has shifted to the buy side. That we are back in a bullish type of environment.
If that ends up being the case, then we can end up going higher for a long time before pulling back.
In regular bullish environments, we can remain overbought for long periods of time.
Generally speaking, the first leg up from the lows is extremely explosive.
There’s a very distinct possibility that this move up, from $428 a share,10 days ago, represents the first actual leg up. And if that is the case, we could see a lot more upside near term before we get a pull back.
So it really just depends on the environment we’re in. On the one hand we’ve been overbought for a while as I’ve shown on the chart. If we’re still in the same bull-bear environment that we’ve been in for the last month, then we’re definitely due for a pullback.
If the environment has shifted to the bull side, then were far from due. Generally speaking in a bull environment, we need to see the QQQ go up to an 80-RSI.
So I’d say right now things are just a little murky. The move up to 490 today is very bullish and calls into question whether we’re in the same environment or whether this is a full-blown recovery.
If the market believes that Trump is done with tariffs, then one might ask why we’re even below the highs right now.
The market needed a retracement. It got that retracement and now it needs to return to the highs. That can very well be the thinking. And if that is the thought process underlying the market right now, then you could expect substantial new highs.
We should get a better sense of things in the next couple days. The market is going to show its hand in the next couple days.
Thanks Sam!
Hi Sam,
Could you write up a post mortem / timeline article of this correction so we have something to reference for what to expect for future corrections (e.g. news cycles, post-capitulation rally expectations, correction leg retracement expectations, etc.)?
I’ll print it out and put it on my wall for the next correction 😉 half kidding.
Thanks!
Sam, what exactly are we looking for as far as they’d market pulling back or pushing through and continuing the rally?
I know it’s been a while since the market has ripped up to all time highs….but is it due?
In terms of a pull back, I’m not really expecting anything that significant. Not for near term reasons.
But we outlined our reasoning for the intermediate term yesterday. Now that the QQQ has rallied 20%+, there is a risk of the market topping. It doesn’t necessarily mean it’s going to happen, but there is a risk.
When looking historically, a rally north of 20% is generally at the far end of the curve.
When you consider that we’re at a key level of resistance like $490-500 a share there’s risk up here
Now, if we’re still in a pool market, and obviously the market’s gonna go back to all-time highs. That’s part and parcel of being in a bull market.
The path back to all-time highs isn’t obvious though. In fact, we don’t really even have an outlook above 500.
Once the QQQ rallies past 500 things can go in a number of different ways.
We do think that a move above 500 signals a motive on the part of the market to return to its highs.
Otherwise, what’s the point in going back above 500?
So if the QQQ surges past 500 a share and goes up to like 510, you can expect that there’s going to be an attempt at all time highs.
How it gets there is unclear. The QQQ can suffer a correction first or it could have a pull back or trade sideways for a while or it could just go parabolic.
We really won’t know until we look at the technicals once we get above 500
I would;ve probably waited on selling the spread at this point, expecting some big move this afternoon, but nonetheless followed your lead!
It’s all a tossup right now. Our decision to sell is based on what we could do with $550. That’s what we’re basing it on. That and the fact that if the QQQ doesn’t perform here, it’s not very forgiving anymore.
There just isn’t enough time to be forgiving. If the QQQ pulls back for any reason, those spreads are going to get crushed.
On the flipside if the QQQ continues moving higher and gets up to 500 then they will surge in value. Like they’ll go up to $.60-$.70 up near 500 in the near term.
Like if the QQQ rallies to 500 on Monday, they can easily move up.
But again for Baratheon $550 can do some damage down the line.
Think of it like this. Three successful trades in a row would take that to $4000. We put on three successful short term spread trades that work out, it’s a jump to 4K.
Add that to our Nvidia and Tesla spreads, and our portfolio could potentially be deep in the green by the time we get to the end of summer.
So all of those factors play into what we’re doing in Baratheon. Just keep in mind there could be other factors that play for other people.
But in terms of what we expect to happen in the near term, it’s really a tossup.
The QQQ is overbought but it’s not that overbought. We’ve seen the NASDAQ 100 Rally way bigger than this before. We’ve seen it reach a 90 RSI.
So just keep that in mind. There is still the possibility that the QQQ can close north of 525 expiration. It’s very low, but that possibility does exist.
Look how much the QQQ is up today. It repeats today three more times and we’re right at the line.
yes, time wasn’t on our side here that’s OK
when you say correction ending does that mean 100% we head to ATH before we make new lows?
Sam,
I want to let you know that by following your QQQ leap trades closely, plus my own PLTR gains, my account today has reached 100% return????????????
I’ve been following you since Day ONE, not only I’ve made huge money so far, I’ve also learned to cope with the market without fear. Looking forward to learning much more from you in the future .
Thanks a lot, Sam ????
NVIDIA seems to lag behind the Nasdaq quite a bit since capitulation.
During the rally after the QQQ went up to 467$ and NVDA to 113$, now the QQQ is at 490$ and NVDA is still at 114$ and seems to be stuck at the 115$ level.
Do you know if there is a specific reason for that?
NVDA used to lead the market! heck it was the reason for the market gains everyone said
AVGO has been pretty solid
True, they have been performing a lot better
Were you still planning on doing a market update today?
Not much has changed to be honest. The hourly is still hanging around overbought. It ended the day pretty much in the same spot as when it started the day. We’re due for a pull-back. Thing could go parabolic. We need more info.
The intermediate-term outlook and long-term outlook are exactly the same. Nothin has changed there. We’ll update our intermediate-term and long-term outlook sections over the weekend to reflect what is currently in play.
Hi Sam – what is the typical hedging position for the long term portfolios? And do you hedge if you’re only holding common stock.