Samwise Quick Reference Handbook
To streamline our daily blogs and conserve space, we’ve organized key resources into a convenient, collapsible dropdown menu below. A sort of Quick Reference Handbook if you will -- as our friends in aviation might call it. By clicking the menu below, you’ll have qu...
Please login to view this page.
Hi Sam,
Apologies if I’ve missed the rationale behind the projection of the next peak in the QQQ, but how did you come to $560 as the next potential peak? Is that just 30% up, in line with the magnitude of an intermediate term rally, from the 426?
Thanks!
So there’s a multitude of reasons for why $560. We talk about it a little in teh next update. But it’s really (1) the next segmented rally takes it up to around $560 (55-point segment); (2) that is the last true level before the QQQ crosses into a different zone ($580-$600 band). At $570, we get too close to $600 for the QQQ to sort of peak. It’s odd, but many peaks typically happen either at $X50-$X60 or at $X80-$Y00. there’s a bit of psychological resistance at $550-$560 a share; (3) the breakout above all-time highs likely paves a quick path up to $560 share with a peak likely to happen somewhere around that point $560-$566.
(4) Then we also have overbought conditions that get in the way of the rally. At $40 of upside from here ($520), we push into deeply overbought at that point;
(5) It’s pretty clear that once we observe the QQQ reach overbought conditions in an intermediate-term rally, it’s typically happening at the 2/3rd point in the rally. From a pure timing perspective, that leaves another 40-points of upside on 20-30ish trading days. The gains slow from here as the number of sessions expands.
Sam, If scenario #1 plays out, what is your best guess as to how long it would take to get down to $487, Is this something that would happen within a week or two, or is it more likely that it would take a month or more?
Yeah a few weeks. So for example, it could just stop here today and then start pulling back tomorrow. That would be indicative of a double-top. Especially if the pull-back is sharp and pushes the QQQ back down to around $510. It’s a week or two thing.
Hello Sam
I’m shocked by this cynical reversal from the market and NVIDIA. I expect a correction like the one on September 5, 2024 and September 6, 2024… To be continued
Best
Karl
Hi Sam,
I’m confused as to what you mean by “so late in the rally”. When you say “late” are you referring to us being 30% into the rally (i.e. late based on size)? I’m assuming you don’t mean “late” based on time since this rally has only gone on for 35 days, which is on the lower end of intermediate rally duration based on the table.
Thanks!
Ah, nevermind. Answered my own question 🙂 You’re referring to the size of the rally.
Yeah rally size. When you look at how far we’ve come in terms of distance from the lows, it’s pretty far along. I mean we’re up 30% from the lows. That’s the biggest rally we’ve seen relative to time. Only covid and the post-financial crisis rebounds were more robust. The rally off of the 2022 lows wasn’t even close. We did see 30% rallies, but they took triple the time.