Samwise Quick Reference Handbook
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What about the Sep 30 spread?
Have the same question
Thanks Sam for the insight as always.If we are confident that the QQQ will sustain correction in the near term, especially since the century mark topples over without another consolidation, why not October 31st 560-550 put spread?
Is it to mitigate risk?
Hi Sam,
Question about
Why do you think $X02 or $X03 is textbook for century mark tests? Seems quite random to me as $2 or $3 dollars above the century mark doesn’t seem to be quite enough for one to confirm penetration above the century mark. $2 or $3 above the century mark almost feels silly, like the market was like “see, we did it. we got above $X00, yay!”, for a lack of better words. I’m assuming $X02 and $X03 are just common prices that we’ve seen century mark tests fail historically, but I’m just curious from a technical standpoint why you think it happens this way.
Thanks!
I think it’s partly self-fulfilling. Everyone buys ahead of the breakout because they expect the breakout to happen and then you have a whole bunch of people who have cell orders right above the breakout point.
It could also just be that a lot of people decide not to put in sell orders at any price in the 590 to 600 level because they are so sure that it’s gonna get to 600 and above
And so to make profits, they wait till 602
Look at what we did we did the exact same thing we chose to wait until 602 or 603 to consider buying our puts because we were so sure it was gonna get to 603.
I’m not so sure on the why of it. I just know from an observation point of view — and this is true of any level not just the century marks.
For example if stock reaches the 80 level for the first time, it often will go to like 81 or 82.
From a purely observational point of view, this is what we see.
There’s an expectation for the asset to push as high as 203 or 303 before peaking.
In Jan 2008, Apple peaked at 203 a share before crashing.
My point about the QQQ going to 603 is that it went through a textbook failure. That’s exactly how a failure of the century mark happens.
The bad news for us is that it was inevitable because of how overbought the QQQ was. And so it’s not 100% clear whether it’s due to the QQQ having been very overbought or whether it is due to the rally having gone for so long that it’s not gonna get through 600.
It’s not yet obvious whether the 600 failure is the result of the market setting a hard line ahead of the correction or whether it was just a near term problem And now that we’ve pulled back a bit, it can retry
Interesting! I didn’t even notice this until you pointed it out.
Possibly an eighth, ninth and tenth segment that takes the QQQ up
It’s never gonna go down again. Should be illegal for brokers to even offer puts atp
QQQ weak sliding bearish engulfing candle in play
it looks like we are trading sideways since yesterday. Does this change the chance to retest the high at all? or it usually takes a few days to play out?
now that we know this is an “official” bubble, let’s ride the bubble! QQQ to $ 700!