Samwise Quick Reference Handbook
To streamline our daily blogs and conserve space, we’ve organized key resources into a convenient, collapsible dropdown menu below. A sort of Quick Reference Handbook if you will -- as our friends in aviation might call it. By clicking the menu below, you’ll have qu...
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-64% 30 Sep QQQ put-spread and -95% on 19 Sep NVDA put.
Damn, Sam predicted it. Now, please let me see the x3-4
agreed on this… and always factor in additional time for the thesis to play out
Are you new here, lol? Jk. This is likely why Sam’s model is always long, rarely sell, and never all short.
Ya basically last time we went long on short dated call spreads and it basically broke even after being down 90% i knew that my risk appetite was basically wait for the third add and that’s that. Even so sam literally said he allocates 3% on his own accounts so im not sure when losing 3% of an account is ever going to be stressful unless it wasnt 3%. Saves so much guesswork because the trade style is not with the trend i.e. contrarian. and it can cause lots of anxiety.
You know we’re at absolute extremes when the almighty Dieselcock notes on day 104 of the rally that we need to remain cautious in case the rally extends to 150+ days. In previous weeks, end of August was thought to be the longest we’d see the rally extend before the correction, but here we are nearing the end of first week of September. This feels erily similar to how everyone felt back in April when the market only ever seemed to go down, except in this instance the market continues to rip up and shake off selling pressure. I can only hope with SPY hitting ATH and QQQ surging 17 points in the last 48 hours that we see a sudden and dramatic sell off soon on overbought conditions. Time certainly does move slowly waiting for a shift in momentum, and we’re now nearing outlier territory. I also find it interesting that NVDA isn’t surging alongside QQQ like we’ve seen historically given its high beta.
Everything you are saying is what many of us are as well. Yesterday was a shift in the Daily discussion and NVDA is definitely off from QQQ this morning. Which is leading which? It’s not often you see them head in opposing directions for long.
there’s nothing new. most of us in the comments predicted this outlier and rally going over 150+ days. I feel like we will have a few 1~2% pull backs, but I don’t think we will have an official correction this year.. I just don’t see market dropping 10% and coming back up to ath again in 3 months.
Really? I disagree. I read most of the comments. No one predicted, they questioned out of extreme anxiety, what if this what if that.
The bottom line is it absolutely can correct 10% and return to $600, it’s almost like we’re forgetting April already.
It definitely can, as Sam has mentioned, we have all the requirements for correction. I am just saying I don’t see that happening all in 3 months
Don;t see that happening bast on what? The QQQ exploded a hundred points in basically a month. Correction could be completely over with by the end of September.
Things can happen very fast. Way too early for anyone to be suggesting QQQ can’t correct and rally 10% with 3 months.
It would be very close in most cases. In most cases, a correction starting in mid-September should hit bottom by mid-October and the market should then be back to its all-time highs by the end of November. Usually it’s bout a 5-6 week process to return to the highs after a correction.
But the market doesn’t always take a straight line. In fact, in 2 out of the 5 corrections since the 2023 bull market began, the market didn’t take a straight line back and it then took a very long time to get back to the highs. It took forever.
In most environments, with normal corrections, it’s a 3-month process to go from the highs of one rally, to the lows of a correction and then back to the highs.
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For example, in the FIRST correction of the era, the QQQ reached a high of $308.88 on February 2, 2023. IT reached its correction low point of $280.82 on March 13, 2023 resulting in a 9.08% correction. The QQQ reached $308.88 again on March 22, 2025. The total was less than 2-months from peak to trough and back to peak again. That’s on a 9.08% correction.
In the SECOND correction, we didn’t return to the highs. Instead, the QQQ fell 9%, rebounded 8% and then sustained a second correction of 9%. Rebounded 7-8% again only to then sustained a third correction. The entire correction is the longest on record in our tables. It lasted 71-days. But that’s also becuase we had what was a triple correction. Tons of volatilty with the market coming right back up to its highs only to then roll over again. It would be as if the QQQ dropped from $583 down to $530 back up to $575 down to $525 up to $569 down to $521 and then rally to all-time highs. Effectively, it was like three separate small corrections. We counted it as 1 correction because the QQQ made progressive new lows.
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In the THIRD correction of the era that occurred in early 2024, the QQQ peaked at $446.11 on March 21, 2024, reached a bottom of $410.10 on April 22, 2024 and then rebounded right through the highs on May 15, 2024. Like the first correction, it took the QQQ a little less than 2-months to go from one high point on March 21 to a low point on April 22 back to the highs by May 15. That’s about 30-40 sessions.
But that was also a smaller correction of 8.1%. So far in an 8.1% and 9.1% correction, we saw peak > correction > recovery within 30-40 trading sessions or 2-months.
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In the FOURTH correction, the QQQ followed a similar pattern as the second correction. The QQQ fell of a cliff crashing 16% from $500.69 on July 10, 2024 to a low of $421.07 on August 5. By August 22, the QQQ had already retraced 75% of all of the losses as it rebounded to $482.82. That’s only 5-6 weeks to go from $500 down to $421 and up to $483.
The QQQ then peaked at $483 to sustained what felt like another correction as it dropped from $483 down to $445.68 by early September. But the QQQ did rally back to $492 (8-points of within the highs) by September 26. It then traded from $491 to $499 (essentially trading at the highs for all of October). New highs officially made November 6.
The fourth correction is a little tricky because we essentially erased almost all of the losses by mid-September and got to within less than single point of the highs by October 29. We were 3-points off of the highs on October 14.
If we’re saying official new high print, then November 6. So less than 4 months. If we’re talking pretty close to the highs, less than 2-month. If we’re talking effectively the highs (less than a point) 3 months.
And remember this is a big correction where we had a DOUBLE correction essentially. The QQQ had recovered to $482 only to then correct again. Even in that scenario, it was a 2-4 month process. Applied to today, the QQQ would fall 16%, almost fully recover by mid-October, fall again, substantially recover by mid-November, reach within 1-point of the highs by early December and then make new highs by January.
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In the most recent correction/crash of 25%, it took 83 sessions for the QQQ to go from $540 on Feb 19, 2025 down to $401 on April 7, 2025 and then back up to $540 on June 24, 2025. It was a roughly 4-month period to go from highs to lows back to highs.
Now that’s on a 25% drop which is the second biggest non bear market correction of the last 20-years.
Most corrections aren’t 25%. They’re mostly 10-12%.
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Now the reason we see recoveries so quickly is because the market is very directional. It either wants to constantly make new highs or enter into a bear market. We don’t see a lot of situations where the market trades sideways. Even when we’re in a melt-up environment, usually it’s in a big uptrend where the market is making new highs every day.
We don’t see a lot of melt-up rallies following a correction where it takes the market 8 months to get back to then highs.
The only times we ever really see the market take a long time to return to the highs is after a bear market has ended.
Otherwise, in most cases, even when we have triple corrections as we had in July 2023 to November 2023, we still get back to the highs fairly quickly.
It’s impossible to predict how this one will play out. But if we’re just expecting a normal correction (8-14%) and a normal situation, then the QQQ should be back at its highs by November-December and making new highs by January where it s should peak again.
Yes, but many people in the comments referred to the 2020 rally and were kind of brushed off – that rally was about 165 days and we are at 150 days from the bottom of this rally. There are nuances I won’t include to finagle the number of days, but that gives you a quick comparison.
Also, it’s easy not to have extreme anxiety when these are model portfolios that aren’t using real cash, lol. Paper trading vs actual trading is entirely different, no?
Alas, not trying to start none but state what I’ve read, attempted to learned, and processed. ????????
P.S. Do think a correction is coming but the ultimate question that remains hard to pin down is a matter of when as it fluctuates quite often, as expected.
Sarcasm? Market dropped way more than 10% this year and was indeed back to ATH in 3 months and we’ve had like 3 3-4% pullbacks in the last month alone lol
Also worth pointing out the same sentiment was hanging about with Nvidia a few weeks ago and it’s down 12% without the correction in full effect
I am talking about having a 10% correction and then going back to ath rest of this year. My point is I don’t see that happening all in 3 months.
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So that’s not at all what we’re saying. We’re not saying this is going to be an outlier case. What we said was to cap position exposure so that if this one were to become an outlier, you’re not overexposed. That’s it.
The key here being that we should always cap our trades to a maximum ceiling on any one investment thesis so as to limit damage when it’s wrong. That’s the point. That the entire point of the post.
We still very much believe this one ends in September. In fact, we believe the likelihood of a correction beginning in September exceeds 95%. We can say that because there are no historical cases of a high volatility rally (+0.4% daily average return) lasting longer than 114-days (mid-September). None. Zero previous cases.
You can predict that this one will all you like. But just keep in mind that every previous market environment had either similar or other compelling reasoning for those rallies to go longer than 114-days and exactly 0 rallies have ever done so.
None have exceeded 120 days much less 130 or 140 or 150. What’s more, only 1 has managed to go on for longer than 110-days. It’s not like 100-day+ rallies are common. This is literally the 4th time it has occurred. And keep in mind that’s only if the QQQ manages new highs. If it doesn’t manage to make new highs, this one ended on day 89.
Well it was a slow day yesterday in that the market was merely tracing your chart. Your article is at least a good reminder. Looking at the ‘Average Gain Per Day’ from your Table 4.1, if the top was at 89 trade days, it shows that this intermediate rally would be in line with the Average Gain Per Day.
From Table 4.1, the Average Gain Per Day for all of the datapoints is ~0.52%.
The QQQ for this intermediate rally spent 89 trade days gaining 0.51% a day which is pretty much the average for all high volatility rallies combined.
At 89 Rally Trading Days the QQQ has reached a Total Rally % of 45.13% and an Average Gain Per Day at ~0.51%.
At 111 Rally Trading Days (~September 15), the intermediate rally would need to be ~57.72% in total to maintain an Average Gain Per Day of ~0.52%. This would bring the QQQ to like 634.50 which goes beyond a hard top at 600. Not a nice over-extension on the QQQ.
If you consider the QQQ reaching 600 in 111 Rally Trading Days (September 15) this gives an Average Gain Per Day of about 0.44% which is still somewhat close to the average and doesn’t seem too far fetched, but this would require some sort of high catalyst or momentum that would need to be reached in about 6 trading days from now (almost 5% up from today).
At 150 Rally Trading Days (~November 7), to maintain an Average Gain Per Day of 0.52%, that’s like a 78% intermediate rally where the QQQ goes above 700. That would be really abnormal compared to just consolidating until trade day 150, 140, or 130.
QQQ up 1% NVDA down 3%
SPY new ATH
QQQ/SPY 70+ on the hourly
Does not feel like it’s gonna run to $600. I just don’t see it.
Agreed. All the gaps are filled. Let’s drop like a stone.
Looks like NVDA is now oversold (if the website I’m using is correct). Do you expect it to ignore oversold conditions since QQQ will soon pull back off overbought? Or do you think it’s possible that NVDA will rebound a bit while QQQ drops (essentially the opposite of this week) before dropping again in tandem with QQQ?
At some point, it has to ignore oversold. The question is when?
Remember, in a corrective environment oversold can continue. Depends on whether we are in a corrective environment.
We could be looking at a bearish engulfing candle today.
Not sure if you can answer this but any thoughts on buying long term puts now if you’re starting a new portfolio? Since we’re at extremes would it make sense to buy them at a discount now instead of waiting for the rebound after the correction?