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NVDA is oversold ? What’s happening to AAPL lol.
It’s normal. When a stock is underperforming by a large margin, often it will rally during big market sell-offs. Money will flow in due to it being so oversold to begin with. There was an analyst upgrade today too. But that’s not surprising. I’d expect to see Apple either barely down or up today.
Which signal of NVDA should we consider buying call-spread today or we just wait and see for next few trading days ?
It’s trading around 126$~128$ now.
So we generally try to give a heads up before we put on a trade. We put it on trade watch, and then execute the trade.
I’d read this here:
https://sam-weiss.com/samwise/samwise-strategies/
and then this here:
https://sam-weiss.com/samwise/samwise-portfolio/
It will give you a good sense of how things are structured here at the newsletter.
Wow! Leaps look tempting. Standing by. Thanks for the update.
Please see 10:00 AM update
11:25 Update on the NASDAQ-100 is important. We may soon be putting on a trade in the Baratheon Portfolio. We’d be buying the QQQ April $525 calls at around $13-$14 per contract for a 13-14% allocation trade.
What a painful drop! I know we are in it for the long haul, but a 17% one day drop in Nvidia is a sight to behold
What is a long term position in NVDL
6 Months? A year? Longer?
Years. Our portfolio strategy is to be long and remain long for 2+ years. It’s our first rule of investing. Take look here:
https://sam-weiss.com/investing-basics/time/
Also here (Rules of Investing):
https://sam-weiss.com/samwise/samwise-strategies4/
This discusses the Core long-term models generally. They’re all 2+ year time horizon portfolios (Arryn, Tyrell, Lannister, Tarly, Stark and Arryn). The ONLY difference between these 6 portfolios is that three are leaps portfolios and 3 are common stock. Two launch at the same time. They represent 3 different starting points.
Arryn/Tarly started in August
Lannister/Tyrell stared in September
Stark/Frey started January 2025
We do this because of this reason here. Eventually, we’ll probably be actively managing 30-40 these over time:
https://sam-weiss.com/samwise/samwise-strategies/
I get all that, but NVDL I just have to ask given its erosion that occurs, I was wanting to make sure it was same boat.
Yeah so normally that would be a cause for concern. I’ve done a close exemption of NVDL a few months back and found that over the long-term it has performed remarkably well. Even in sideways markets. It has also largely outperformed its expected 2-1 return ratio over the long-term.
I know they advertising it as a daily trading vehicle AND they make no forecasts, set any benchmarks or any expectations for the long-term. But even then, it has consistently done better than 2-1 over the long-term and lost less than 2-1 on downturns.
That’s why we like it as an asset. Purely due to performance.
Sam, this Deepseek noise doesn’t worry you at all?
So I’m fairly certain it’s overblown. It’ll have some impact. But I think that impact will be largely overstated. The action we’re seeing today reflects the markets worst fears about its impact. The market always goes to the worst case scenario first and then later restore value once it confirms the impact.
When you think about the long-term direction of Ai generally from where we are today and ending with true Ai, we’re still ocean’s sized divided away from getting there. There will always be tremendous demand for increasingly powerful chip-sets. Both in terms of GPU’s and in QC once it becomes more developed.
What’s more, there’s probably a lot more going on behind the scenes than what has been released to date. Deep Seek didn’t just build its LLM on a set of would be Atari chips.
If it has required virtually everyone else to build their models on the foundation of increasingly powerful chipsets, then you can expect that there’s more to it than what Deep Seek is letting on. You already have a lot of analysts hinting the same.
@Sam could you have a look at MSTR? Let me know what you think.
@Sam, MSTR has stabilized, hourly RSI is at 22-24, daily at 44 which is not yet on-par with August 2024 but close. It may be a buy candidate. Issue: the bid-ask spread is relatively wide.
Hey bud. Good call on that $VIX trade. I hope you pulled the trigger because DAMN.
With MSTR it has reached a low RSI on the hourly. If you look at it historically, sometimes that means a bounce ahead of another leg lower and there’s key support at $310 and then again at $285.
Minimum it looks like it’s ready for some kind of a rebound. the question is what happens after that rebound.
MSTR is extremely volatile. When it does bounce, it bounces big-time. It’s already off 8 from the lows and still not out of oversold conditions. So if I had to guess. A rebound up to $340 and then after that it may pull-back again for a second instance of oversold conditions. That has happened nearly every time it has reached oversold on the hourly going back 6 month. Take a look
Yes I took the VIX trade but just one contract. I would have made 50% but it all melted during premarket. I sold shortly after market open at with only +12%.
MSTR : I was thinking about a spread 350-360 for April, it was around 3.50 $ half an hour ago, but now at over 4$ is less interesting. The 360-370$ is just as interesting, I’m thinking that if it makes it to 360 it will likely make it to 370$ just as well. Bid-ask is not very good, the execution is risky.
Holy cow, I was able to fill MSTR spread 340-350$ at 3.50$ x 2c. April.
I think that this must be significant: the VIX almost completely melted down from pre-market 22.5 to the day closing 18.0 which is on-par with what it was just two sessions ago. It’s as if the market is not expecting much turmoil for the next few days.
Do you think there might be any need to hedge the Apple positions? It is up to $230 now
In a larger allocation or in a longer-term portfolio we would. But with such a small allocation, we’re mostly in it for the trade to close out at $240. This is going to be more than a 1-day rally when it happens. when it starts it will go on for 10-15 sessions minimum.
today could be the start of that or just a rebound. Difficult to tell with the market volatility. But I do think with the QQQ oversold, Apple does have a positive set-up ahead of it. There’s a good chance the QQQ may be up big tomorrow. And if we get another strong up day in Apple, then we can sell our march calls, maybe sell covered calls against our April $220’s and then just wait.
I guess after teasing us with a correction for an entire month, it finally happened. Or is this a back-to-back correction like August 4, 2024?
So we’re still technically in the same sell-off. Just another hard leg down after a big bounce. In August, it was a true double-correctio because the QQQ rallied 15%. We went from $423 up to $486. That’s a $60 rally on the QQQ.
The rebound here was only about $33. Half of that. This is all consider the same single move. And if the QQQ doesn’t make new lows, then the QQQ will have been considered as bottomed back when it reached $499 over 18-sessions.
I remember you said that once Apple begins its rebound it will be explosive and continue over 12-15 days. Is this the beginning of that rebound then? Given it’s 3.6% up today, do you think there will be a slight pullback before it continues higher?
That’s usually not evident until the rally gets going. If we’re up 5-6 days and Apple trading worth $240, then I’d say we have enough evidence to conclude the rally has started. A single day is meaningless. It’s a good day. But we won’t know what to make of it until we see follow through.
I can say that since Apple did reach oversold conditions on the daily, a 3.6% move like this is often the beginning of a bigger move up.
But we won’t have full confirmation until Apple puts together a string of bullish days. in that case, expect a rally all the way back to the highs.
AVGO will move in lock-step with Nvidia and the rest of the AI plays. So since we’re already long Nvidia, we can’t really buy AVGO because we get the same result. It’s the same as adding to our NVDA position essentially. They’ll slightly deviate at times, but it’s mostly correlated in situations like these.
When Nvidia rebounds, so will AVGO and vice versa.
Thanks as always Sam. I can’t bring myself to join you in options and such…but I did add 500 shares of Nvidia at 117.80.
https://stratechery.com/2025/deepseek-faq/
I am posting here this deep review (pun intented) on DeepSeek vs what it represents for NVDA and other AI actors. I am not the author.
In a previous life I was doing the type of work of hyper-optimizing software to hardware by use assembly language and system configuration. Yes, it can do little miracles as cited. I can vet that its technical analysis is plausible.
The article also talks about the Jevon Paradox, here’s the link: https://en.wikipedia.org/wiki/Jevons_paradox
For NVDA today, are we thinking a test of high 120s followed by another leg lower down?
Yeah. Normally, I’d expect a larger rally. But I think both given the news and the size of the selling pressure, it’ll go a little different this time around. I think rebound > sell-off.
Eventually, the market will digest the news, realize that efficient doesn’t translate into less revenues. We’ll get increased demand for Ai generally which will in turn lead to more sales at a lower ASP.
So I think for now, we’re just sticking with the $140-$145 spread. Even that one is a little too far. The reason I like it is because on a bounce it becomes within reasonable striking distance such that we should see a pretty sizable percentage gain.
Our plan is to sell half of our position on the rebound back up. So the 5 contracts we bought yesterday at $1.00 we’ll hold and then try to sell the other 5/7 contract that we bought at $1.30. That will both reduce our overall risk and cost-basis because now we’re in a smaller position cost wise but in the same sort of position that we were in to begin with — 7 contract long at a much much lower cost near $1.00.