Samwise Quick Reference Handbook
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Sam, can you specify the timeframe when you’re talking about the full 35.57% correction?
I think the April 2024 decline is 22%.
Sam is merely drawing similarities between two rallies:
◦ April 19 2024 to June 20 2024
◦ April 7 2025 to yesterday.
The point is that big rallies in Nvidia tend to result in “big retracements”.
Pull-backs are healthy, but the fact that there have been minimal pullbacks seem to indicate that the rally is extending far enough for it to be classified close to the late stages of the intermediate rally, and there is an expectation that Nvidia and the market should pull-back.
Sam’s NVDA percentages in the article:
April 2025 rally %: ~89.84%
April 7 2025 (Low $86.62) to yesterday (High $160.22)
April 2024 rally: ~86.17%
April 19 2024 (Low $75.61) -> June 20 2024 (High $140.76)
June 20 2024 Pull-back: ~16%
June 20 2024 (High $140.76) -> June 24 2024 (Low $118.04)
June 24 2024 Re-test attempt: ~15.35%
June 24 2024 (High $118.04) -> July 11 2024 (High $136.15)
June 20 2024 Full Correction: ~35.57%
June 20 2024 (High $140.76) -> August 05 2024 (Low $90.69)
I see the pull-back you are talking about, and that 22% pull-back you are referring to (March 25 2024 to April 19 2024) begins before the start of the April 19 2024 rally.
I’m getting antsy with all these puts. So much hedge. It’s like we are betting against the market 🙂
It’s only 1% of portfolio.
Nuclear is right. These are all just hedges. We put them on when it’s clear the market is nearing a top. But we’re a long oriented publication. All of the long-term portfolios are overwhelmingly long.
Like the common stock portfolios are probably something like 95% long and 5% short oriented. But that 5% will protect the portfolio in a crash.
I guess it feels this way because we also have a lot of cash right now and we have just fully exited NVDL and added a lot of Nvidia hedges. So it feels like if Nvidia goes parabolic right now, we will suffer
So here’s the way to think about it. Over the next few months, what we know to be the most likely end result is Nvidia falling well below $150. At some point in time between now and let’s say October for sure, Nvidia will have likely seen prices well under $150 at some point in time between now and October. That is regardless of whatever happens between now and then.
There is a possibility, though very small, that Nvidia can run to 180 or 200 to share. But that possibility is very small and even if it happens, the end result is price is below 150 anyway.
What we know to be highly likely is sub 150 Nvidia at some point in time between now and October.
What we don’t know is whether Nvidia will see leveled above $170.
We don’t know how high it will go for sure. But we do know the end result is sub-150.
That’s what we’re doing here. We’re betting on what we know to be the most likely end result.
Think back to every time we’ve seen Nvidia run 90%. What happened after? Just go back to the bottom of the bear market and check each rally. Note what happened after. Nvidia is going to see a 20%+ decline now with a near certainty at this point. A 90% run has a consequence. At 172 a share, it’s a 100% rally. A 43-point drop would be a 50% retracement is the run. That’s at $172. At $172 the target $126 on the downside.
20% is 30-points. And notice 20% is on the small end of the spectrum for corrections. It’s usually 23-35%. That’s the typical range.
Hence why even if Nvidia runs to $200, the decline is to $150. That’s even on a low probability run to $200.