Samwise Quick Reference Handbook
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I haven’t seen Sam this confident and aggressive since April 7! Let’s go!
Hi Sam, to be clear, are we expecting the QQQ to pullback off overbought before potentially touching $600 and rolling over, or ignoring overbought to push to $600 since we’re so close?
according to me :
Bull trap (600 → 620 before chute)
$620 max then same targets
Base case: $492–$528 (-12 to -18%)
Bear case: $450 (-25%)
Sam you confirm ?
I don’t think we get to $620. But it certainly can happen. That’s typically the breakout point for century mark. Once a stock gets above $X20, it’s over. It’s a breakout at that point. Though like we saw back in Covid, the QQQ did rally from $160 to $230 before immediately cashing.
Then again, that’s almost becuase on the preceding correction, the QQQ tested $200 and failed once before. So that was the second attempt at breakout. So in many ways that move up to $230 was similar to the QQQ going to $540 back in Dec/Feb. Same sort of move.
Original attempt at $500 occurred in July. The QQQ fell to $420. Then finally pushed to $540 before crashing to $400.
Here, this is the first real attempt at $600 a share. So I do’t think the QQQ gets past it to be honest.
I think the highest we go here I like $603 – $604. If it’s really aggressive, it could be like what happened after the bear market ended. The QQQ went as high as $313 before sustaining correction.
But as I see, the greatest odds point to a peak at $599-$603. Some small chance that we get to $610-$613. Extremely unlikely to push to $620.
That’s how I see it right.
——
KEY POINT Not Posted in Daily Briefing
There is one thing to hammer home here. We talked about this a few days ago, but this should be introduced again.
There is a well defined pattern of the QQQ alternating between peaking at century marks and then mid-century marks. We’ve been seeing that pattern pretty darn stead for several years now in a row.
I didn’t notice this until very recently.
The QQQ top patterns alternate between the QQQ peaking at $X00 and $X30/40/50
For example:
Bull market rally #1: $284 up to $388 (century peak) > correction down to $339
Bull market rally #2: $339 to $446 (mid-century-peak) > correction down to $411
Bull market rally #3: $411 to $503.50 (century peak) > correction down to $423
Bull market rally #4: $423 to $540 (mid-century peak) > correction down to $400
Bull market rally #5: $401 to $600 (century peak) > correction?
^you see the pattern. This is in addition to everyting else we’ve outlined. We even have a well developed pattern of the QQQ alternate peaks at century and mid-century marks. And this one was due to top at the century mark ($600).
Thanks for changing the push notifications????????
We are 50bps off QQQ $600, NVDA tired lagging
Waouh Sam, amazing analysis !
Clearly overbought (threshold >70).
We can see that in the previous images (blue and red arrows), an RSI >70 has always led to a rapid correction.
2.Current price: $596.55
We are close to $600, a psychological and historical return level.
The red arrows show an overextension zone comparable to December 2024 and February 2025 → all followed by corrections of -10 to -15%.
3.Moving Averages
MA50 ($571): first short-term technical support.
MA200 ($526): major support and likely target of a normal correction.
4.Unfilled gap (“MAJOR GAP”) between $485–495
The market almost systematically returns to closing these gaps.
This coincides with a correction of around -18% to -20% from $600.
5.Volumetric Structure
Lower volumes on the rise → sign of exhaustion.
Previous rallies (green circles) have all shown the same structure before reversals.
6.Key Levels to Remember
$600: Psychological resistance / high potential area.
$571 (MA50): First short-term support.
$526 (MA200): Major support (-12% correction).
$495 (gap): Critical zone → probable target (-18% correction).
$450: Extension of the bearish scenario (-25% correction).
7.Summary
Setting technique: Extreme overbought, pattern identical to previous highs → high probability of correction.
Target 1 (cautious): $571 (MA50).
Target 2 (classic): $526 (MA200).
Target 3 (gap): $495.
Extreme target: $450 if macro stress.
Hey Sam,
Do you recommend following all similar portfolios? For example, is one of the LT Options portfolios sufficient for the leaps trade updates?
SO I try to align them as much as possible. But Lannister has diverged a lot. Arryn and Stark are more similar now.
The common stock portfolios are nearly identical except for launch date.
The hope is once the correction occurs and we can reposition everything, we’ll have identical portfolios again.
At the century mark of $300 on 12/16/20, QQQ rallied another 10% to $330 before bottoming on 3/5/21, no? What am I missing here?
$230 a share. But that was already after hte QQQ had tested $200 already previously.
if you look at the previous correction, the QQQ rallied to $180 a share. That’s a full test of the $200 level. That’s because the QQQ came within $20 of $200 a share.
So that on the next rally it would push through. Sort of like the failed attempt at $388 back in July 2023 leading to a breakout to $446 in the next rally in March 2024.
Ive been rooting for an outlier rally or blow off top for a while. Hopefully we go a little bit more but just shy of 600 is also great for two specific reasons:
Phenominal analysis as always Sam. Keep up the good work!
Hi Sam,
As the correction is unfolding how do we manage the allocation plan towards our long leap position once we hit the 8% correction mark? Presumably we don’t want to go all in once we hit 8%.
For example, let’s say our targeted allocation for QQQ leap position is 100k. Just example numbers, but do we put 70k at 8% down, another 10k at 10% down, another 10k at 12% down, and the final 10k at 14% down?
What would be the allocation strategy that strikes the best balance between hedging against getting left behind on a premature ending vs. optimizing for returns? In order to optimize for returns you would want to allocate MORE as the correction progresses deeper and deeper, but if we don’t allocate enough at 8% then you run the risk of being under-allocated and left on the sidelines on the rebound.
Thanks!
Hi Sam,
Wanted to get some clarification on what you mean by
You mention “Think about that swing in probability”, but you’re comparing 10% and 15%, which doesn’t seem like a big swing to me? Sounds like what you mean to say is that 10% of corrections end by 8% and 85% of corrections end by 14%. Is that correct or am I misunderstanding your phrasing in the first sentence (“For example while -8% corrections occur in 10% of the cases as we’ve shown, -14% corrections occur in just 15% of the cases!“)?
Thanks!
Hi Sam,
I was originally going to include this question in one of my questions above, but I think it deserves it’s own comment.
Currently, we have short term put spread positions in various portfolios. As you’ve outlined above, there is non-negligible risk (1/10 times) of the upcoming correction prematurely ending once we reach 8%. In order to hedge against this we plan on starting allocations into our new long positions. However; I’m thinking we should ALSO do the analog to this and start trimming our short positions. Would that be correct?
Thanks!
Probably a noob question.
You are going to close the Sept covered calls and the long calls and move to cash.
Any difference letting them getting exercised by the platform and receive the cash?
Is there a possibility where the covered calls not getting exercised even though its in the money?
(If yes, what are the odds)
Is it wise for me to just let it expire or getting exercised by itself at the close of sept19?
Any repercussion doing that?
They generally are repercussions and each broker handles it differently. Our preference is to never let it expire unless they’re gonna expire worthless.
So we are always going to close
global stock market cap nears 150 trillion dollars! can you believe it?! The bubble bubble market is just getting started!
So I’d rather manage the positions independently and live. When closing out as spreads, I’ve found that you often have to close near the asking price because spreads are harder to close than individual calls/puts.
And this is particularly true when there’s a wide bid-ask spread.
So over the years, I’ve moved toward just closing them out as individually unless it’s a tight spread between bid/ask.
Sometimes I’ll close it out as a spread. It’s very circumstance dependent.
It would be very poetic to me specifically if the correct starts today since February 21st I stepped off of a plane to my friend’s wedding to see that the market had dipped considerably, and now today I have another flight to a wedding today.
Still, hoping it makes new highs today first so it can be the longest rally instead of being tied
But I suspect that when everyone is expecting it to call back, he will go over 620. I hope I’m wrong.
@Sam, what’s your current train of thought regarding the NVDA puts? As I understand it, you expected a small bounce from last oversold conditions on Wednesday/around Fed and another leg lower on which you planned to roll the puts forward, but the bounce yesterday went way past that.
Do you still plan to roll them forward if NVDA gets oversold again in the next few days? What’s your estimate, percentage-wise, of the next oversold conditions leading to a bounce vs. getting ignored and leading into the correction (if that’s possible to answer now)?