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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Please check Nvidia update.
It seems that the good news with the QQQ potentially limping into the new year in the $545-550 range would be time for a NVDA rally from oversold conditions. Do you see that as likely if the QQQ doesn’t pull back this week?
It also seems that a NVDA rally into the new year with the market primed for a correction could help induce some turn of the year profit-taking and a broader market sell-off, though that seems rather likely, regardless.
So Nvidia is giving off very strong rally vibes. My initial gut instinct was to buy this morning. That’s my impulse when looking at the chart. But what gives me pause are the two issues I outlined above. The potential head & shoulders to, the fact that Nivida has retested $130 so many times and the potential of the QQQ totally unraveling at any moment in time are all big worries. It’s hard to go long into that risk.
That’s fair. I’m really just hoping to have a decent exit for some positions to free up cash before the correction. I realize that the QQQ limping into the new year is just one possibility, and I’m assuming and hoping one with lesser likelihood. I’d still like to see a post-FOMC pullback this week.
Please see update on our portfolio and the trades we plan to make in the coming days.
Kind of actually. So last year, the NASDAQ 100 peaked ahead of a 5% pull back on the last two days of December. The selloff began in December and we bottomed in early January. And that was a pretty substantial pull back that started in December.
What’s important to understand about 2023 is that the stock market had just sustained a 71 day long correction that began in July and ended in November. So as 2023 is concerned, a new rally had just started in early November. So the period was marked by heavy bullishness. Usually the first or second rally off of the lows is very powerful. And in fact the first rally off the 2023 November lows was one of the strongest and longest of the era.
So the rally was just getting started in Dec 2023, and even then we started 5% in the last days of the month.
In 2022, the NASDAQ 100 actually peaked going into the fed after a massive rally in the first half of the month. The second half of the month saw a 12% sell off in the NASDAQ-100. The QQQ dropped from $290 down to $255 in just 2 weeks. It was a very bearish two week period.
Then we went into the new year and the stock market skyrocketed beginning this new bull market.
So the last two December’s saw some heavy selling during some part of the month. And in both cases, it was during the ladder half of the month where the Santa Claus rally should be
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Actually let me edit that. The $QQQ dropped on the last day of the year last year. The 5% pullback after the segmented rally started on the final day. The QQQ reached a high point in the 28th ($412) and dropped to low of $404 on the 29th. It reached its ultimate low of $393 in the first few days of January.
Also, earlier in the month, the QQQ ended a prior segment in November 22 and that sell-off extended to December 4. The QQQ fell 2.6%
So it’s a little hard to judge last December. That’s because last December marked the start of the second segmented rally of the overall 30% run we had between November and March. The first segment ended at the end of November and the second segment ended at the end of December.
This rally by comparison started in the middle of November. So this is a very different situation.
When you consider the fact that in 2022, the QQQ ended a very strong rally on the fed tells me that the market is very capable of selling off in the last days of December.
So while this market could rally for the final 10 sessions of December, I think there is a higher likelihood that we see the beginning of the pull back sometime between now and then. I think it would be really tough for the market to rally another 10 days to 31 sessions. And it certainly can’t rally big time in that period. If the rally picks up steam, it is likely to see a heavy sell-off at some point.