Samwise Model Portfolios
The portfolios below are separated by launch dates. Each portfolio is entirely independent and has no bearing on any other model portfolio. We launch entirely new portfolios during each market correction as an illustrative tool for new subscribers who weren't present during...
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Thanks Sam – is there a way you can insert a live feed of hourly RSI of QQQ on your daily briefing page? To me, this sounds like one of the most important factors of the market predictability and I think it would be great to see what you’re looking at. No worries if difficult tech wise etc. Thank you
Not sure how we could accomplish that. There might be one thing we might be able to do but I’m not sure one would get actual live updates without being subscribers to http://www.stockcharts.com. Stockcharts.com does allow advanced user to create publish chart lists, but I’m pretty sure those won’t update live without a membership. I’ll look into it.
But I do think stockcharts.com is a good tool to have as an investors regardless.
When you’re looking at hourly RSI, what period do you prefer to use and why?
The period could be anywhere form a month to several months. It depends on what I’m focused on at the time. So for example, if I want to compare previous overbought/oversold periods, I might go out toward several months to a few years. If I’m looking at a specific trend or formation, maybe a few months. It really depends on the circumstances and what we’re trying to look at.
I meant the RSI period. I’ve seen you’ve used RSI(14 hours) quite often. Why 14 hours?
So when I get to the chapter covering technicals, you’ll soon see why. The reason technicals work is because so many people watch them. The core overbought and oversold indicators are variables in algorithmic trading and are widely used as buy/sell indicators. We don’t use other less common indicators for that exact reason.
We use 14-bar RSI because everyone else is using them. The underlying basis for why technicals work is due to (1) intrinsic properties which don’t apply to RSI; and (2) market psychology. We’re capitalizing on the broad overall psychology of the market. When stocks becomes extremely overbought, people like me pull back from buying. Alternatively, when stocks becomes oversold, people like me step in and buy. It becomes self-fulfilling. Because people like me buy when stocks are oversold, they bounce. That bounce becomes highly correlated with oversold conditions.
We’ll expand on that more down the line. But that is why 14 instead of 7 for example.
Sam, I think there’s a typo in the Lannister (LEAP) portfolio trades list. I think item 5 should be a PUT option.
5) Buy to Open Nvidia (NVDA) December 2025 $100 Calls @ $10.05 x 2 Contracts made at 1:57 PM EST on October 17, 2024.
Thanks for the heads up.
Hey Sam,
I already posted this question under an older article, but I think it might get lost.
For calculating those tables of expected prices for options at different prices of the underlying and different points in the future.
How do you calculate those? Is there a (free) program? I am assuming you dont calculate them by checking each value individually in the options chain by using that calculation you explained in a post about hedging a couple days ago?
Thank you:)
So I do check them individually, but that doesn’t take more than 5-10 minutes at most. That’s because I see the entire option chain very quickly using ThinkorSwim. You can also just use an options calculator as an option. But I actually think that might be a slower method only because you’d need to do it for a lot of options.
But just to give you an idea of time, it only took me about 20 minutes to put together those tables and publish an article on them. So while it might seem like a lot of legwork, it really isn’t that much work.
Thanks a lot!
Let me add one more point. As hedging is concerned, in most cases it doesn’t require a rushed trade. Crashes are so extremely rare that hedging can be something that takes place over a period of time.
So even if it takes 20 minutes or 30 minutes or an hour of work, it’s worth it down the line and it’s not in any way time sensitive.
There are times when you do need to rush to put on the hedge, but in those cases, the hedge is very obvious and short-term in nature.
Let me give you an example. If we were putting on a trade in the 5K to $1 million challenge, we’d hedge that trade with a certain near term expiring put. That would usually be a four week expiring put option and wouldn’t require any sort of extended analysis.
We plan out the entire trade at the same time and so we would go long and short altogether at the same moment.
But when planning a hedge on a long-term portfolio, one can take their time. There really isn’t a huge rush at all in most cases.