Samwise Quick Reference Handbook
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It just crossed 473$. Let’s see if it goes to 480 or close in next 1-2 days
Wait, does this mean the second leg has already happened given the heavy buying support around 460’s? I was under the assumption the second leg would breach that zone.
In theory the second leg down would reach $428. Sam mentions in the article ‘Correction Day 29: Potential Capitulation; very Likely Rally Intraday today‘:
And in the same article, Sam mentions that corrections deviate from theory at some point and
His statement is true when you take a look at how previous corrections generally end earlier than expected on the QQQ chart. Also, this correction’s rebound so far has not gone far enough to anywhere near 428 and indicators do not look to go in that direction at all (very unlikely rather), and is rather exhibiting a bullish double bottom currently.
@Mr. Meow, I read Sam’s message as the $428 leg was pretty much off the table given how weak the retracement was, and that there simply wasn’t going to be enough selling/too much buying pressure to allow it to go far below $460.
Zephyr & Frist Name are right.
So in a “perfect world” where downtrends unfold in a 100% textbook manner, here’s what should happen.
However large the first leg down, that’s how large the second leg should be after a 50% retirement. That’s the ideal world.
So since the QQQ fell $75, it should have rebounded $37.50 and then fallen another $75 on the second leg. Rebounded $37.50 and fallen another $75 on the third leg so on and so forth.
That’s how a downtrend should unfold under the “ideal” textbook circumstance.
The problem is ALL corrections deviate in some way. It’s the deviation that causes the demise and end of the correction.
In this particular correction, it was the rebound not going far enough. We didn’t see a $37.50 rebound. We saw a $27.50 rebound. It fell a good 30% short of what it should have gone.
Some corrections, the rebound goes too far. When a rebound goes too far, you get a different set of problems.
But as the current case is concerned, the rebound didn’t go far enough. That means the second leg down is likely to be smaller than the first because we’re like to experience oversold conditions sooner which will lead to buying.
Also, when the rebound doesn’t go far enough, you don’t bring in enough new money that will be the fuel for the 2nd leg lower. Basically, we’re reaching seller exhaustion.
What’s more, the evidence so far confirms this hypothesis. The second leg down is now weaker than the first with the smaller rebounds going further the rebounds we saw in the first leg down.
If the QQQ manages to push past $480 anytime soon, then it probably spells the end of the correction.
Sweet, thanks Sam + everyone, makes sense to me. Last question, any concerns with deteriorating economic conditions across Europe, China, Japan impacting the US market? I believe they’ve had to deploy quite a few stimmies to kickstart their economies.
Thanks Sam, what’s the probability that the QQQ back ATH during May ?
As soon as my vert spreads break even or thereabouts I’m dumping them! Going back to long term investments.
Sam might dump them earlier, really depends on the call-spread target price lol. We are at 2.45 in Targaryen and 2.36 in Baratheon right now.
I wish we were at 2.45/2.36
There are still 30+ trading sessions until May
Hi Sam is your plan to still reduce exposure when NVDA gets back up to $115?
Didn’t send one out today.
Incoming ‘“we’re being treated so poorly”, “the united states is being ripped off”
After hours pricing action indicates that the market is not responding favorably and may retest the lows
oh it’s not happy at all
Market is crashing after hours
Crashing straight 15 point after hour ?!??
20 points!!
I know we don’t pay attention much with after hours movement, but it is a fascinating looking drop.
any thoughts on the market price action after tarriff announcement, Sam?
Sam your commentary to the after hours market movements would be good to hear please
Definitely agree
market should be down 10-15% tomorrow. QQQ is heading to 400. Insane tarrifs including 54% tarrifs on china. Bye bye stock market it’s been fun guys! I’m glad I have puts!
Maybe for an instant but even then that’s extreme. I think things are going to shake out just fine.
??? trump just started a trade war with the whole word. Bye bye stock market. We will see massive double digit (10-15%) declines tomorrow no doubt
Disagree
Not bye by stock market lol
markets are down double digits in 2 days, see I told you!
Was that really a surprise, though? Your comments seem like an overreaction to the after hours action. What matters is tomorrow’s open and the subsequent reaction.
dow futures down 1000 points lol
markets are down double digits in 2 days, see I told you
it’ll pop tomorrow morning after the shorts are sold, careful buying into this market on that pop folks it’s got a long way to go down especially if there are more tariffs from other countries
markets are down double digits in 2 days, see I told you..
How do you ensure its a closed discord group Smiley?
I’ll pass, I get enough random commentary on the news from WSB. I’m interested in Sam’s strategy and the techincals.
I’ve learned a lot about stocks, and the world may be going to hell in today’s after hour market, and I may be underwater in the near term, but I think once the cycle stabilizes, we should be able to capitalize and recuperate our losses from the overbought/oversold cycles.
Assuming of course that the cycle stabilizes within the 4 years of the current administration.
If our ST portfolios are cooked, it’s sad but it was a gamble from the get go.
Sam any thoughts on the after hours crash??
See update.
apparently White House Says Taiwan Tariffs Won’t Apply to Chips per https://www.barrons.com/livecoverage/trump-tariffs-april-2-liberation-day-news/card/taiwan-s-high-tariff-rate-will-be-bad-news-for-nvidia-yHumoa3Fk27SwMk8Ggbd
should be bullish?
Sam, I’m curious your take on if your comments from earlier in the day still hold and you think April will be a full blown rally?
NYMO closed at +15 today. Do you think it’s even mathematically possible to get to -100 intraday from +15 ?
Gotta say. This investment startegy is not easy psychologically. It makes a lot of sense to be greedy here and not at the top, but without Sam I don’t know if I would be holding on still.
wait till Correction Day 110 the historical data will show a bounce is imminent
sentiment driven
Another thing for you Sam… With the likely oversold conditions are you planning to make trades right at open?
To everyone reading, I think taking a deep breath would be wise. I sense a lot of anxiety and after hours doesn’t tell a lot for one, but also, having a disciplined approach is key. We were all aware of the tariff talk for many months now, and having had that information we entered the positions.
I don’t want anyone in here to get thrown off course over this. Deep breath and discipline.
maybe we can finally accept this as regime change, not as a mere technical event.