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Thanks, Sam, for this summary.
I also find the situation strange with the VIX and the significant decline in certain stocks like CL2, LQQ, NVIDIA, PAYPAL…
I agree with you about the $100 support for NVIDIA; I’ve been talking about it for a while! 🙂
Is it possible to continue to see a dip before the imminent rebound in 10-15 days, according to the statistical table of correction and rally days, or a rebound starting on April 15th?
Since it seems complicated to see NVIDIA back at these $90-$100 levels, will you be hitting the BUY button on NVDL and NVIDIA?
Strong catalysts in May to come (quarterly earnings release and conference in Taiwan) and perhaps other good news like the Arizona factory and strong demand for NVIDIA chips for the AI and robotics sectors.
I would also like to take this opportunity to ask for your analysis on copper, particularly Freeport McMoran and Future Copper Leverage 2 or 3.
Sam ?
Sam, Yesterday you said that if QQQ hits 450 this morning, it would probably rally from there. Do you still think we will rally today if QQQ gets down to 450?
So any big gap is almost always immediately closed. If not today, within the next few days, we’ll close today’s gap. The market is going to rally big time soon.
The market prefers to gap down small, close the gap and then sell-off big intraday. It doesn’t like to gap down big and then selloff from there.
So the fact that the QQQ gapped down nearly $20 means we’re likely to see a huge rebound back up to yesterday’s close.
But that might not happen today intraday since we don’t have capitulation. If the $NYMO had pushed to -100 and the $VIX had shot up to 50-60, then for sure yes. Today we’d see it starting right around now. Usually the first 30-40 minutes we get selling and then BOOM! Rebound.
We’ll probably still see the market stage a rebound soon due exclusively to the large gap.
Thanks Sam, where do we go from here? Still tracking $520 in April?
I recognize your satire
I recognize frustration and emotion, and I think disagreeing or pushing back against the thesis can actually be constructive and productive. But comments like this (and many others) aren’t really productive for anyone. We are lucky to even have a resource to turn to and learn from with these daily briefings. We have to accept that there are risks with these trades along the way
There is a lot to be learned of the technicals, something I’m fascinated by and yes Sam made some great calls but not to challenge the idea that nothing is different at all this time when clearly they are different does no one any favors. The QQQ isn’t collateral damage here- I’d say it was the target itself. What’s under assault isn’t just the tech sector, it’s the entire model of globalization that made QQQ what it is. AAPL’s margins are under siege, Nvdia’s supply chain is compromised (and kind of looks like Trump is inviting Taiwan to get invaded). This is about sovereignity, tariffs and control. The QQQ has become a symbol of everything that thrived under the old order. That’s why it’s being broken. I’m not frustrated, I’m flummoxed why it’s not being more widely acknowledged.
Roughly how much more points down in the qqq to get to 30rsi on the daily?
~$450 we should see it already 32 on the daily, 29 on the hourly
We’re at 32.7 right now.
Hi Sam,
what is your take on the current administration’s continued effect on the stock market? It seems like every time we have some sort of anticipated rally starting up, the admin comes up with something new that drives the market lower. The trade war is likely to escalate with reciprocal tariffs from all over the world and the admin will respond in kind as well. This seems to be throwing a wrench in our strategies over and over.
So overall, the correction STILL has not remotely deviated at all from what we’ve seen historically.
I’ve seen a lot of comments that suggest that the market is somehow behaving off trend. It’s not. So far this correction is very in-line with all past corrections.
We’re day 32 and down 16.37%. That’s normal. August correction for example was 19 days and 15.91%.
While this one has lasted 13 days more than August and is down a full 0.46% (less than 1/2 a percent) more than August, it’s still within what we see as a normal range for a regular correction.
There’s nothing special about this correction yet is the point. Nothing about it that says, “Trump is making it all different.”
No we’ve seen this exact type of thing happen before and with regularity. During the European debt crisis, the market was hammered over and over and over and over again by the same news. Anyting negative coming out of Greece, its Austerity or potential contagion lead to further downside.
During 2022, any news on inflation repeatedly pushed the market lower.
It’s not an uncommon theme. the market eventually gets bored of it and moves higher.
Again, nothing abnormal about this correction, its timing, its cycle or its bottoming formation. It’s all consistent with what we’ve seen in the past.
Thank you for being patient with us! I guess people are worried since this correction unfolded in a way where it just didn’t really follow the „average“ course as you laid it out during the last 3 weeks. Which is obviously not to be expected.
Since I followed you I was always impressed by the accuracy of your predictions, but it’s obviously foolish to expect that all the time. I definite learned a lot the last weeks.
people are worried because they are far poorer than they were 30 days ago
I’m definitely envious of people who joined back in August and september when those played out exactly as Sam outlined.
The strategy works in a sane market.
Honestly, it’s Stark that hurts the most lol. Still in its early stages and unable to hedge, it’s taking the hardest beating amongst all the LT portfolios.
Stark will end up being deeply positive when all is said and done. That’s a long-term portfolio. It’ll do well. We’ll hedge on the oversold rebound that is coming.
In fact, we’re going to add with the cash on the sidelines, close that position on the rebound and then hedge.
Tariffs aren’t a lagging indicator — they are an instant, irreversible profit margin guillotine. A single executive order can alter EPS forecasts by billions overnight.
This isn’t inflation slowly ticking higher — it’s a 54% toll levied on the global supply web. Market “boredom” may come — but not before significant structural damage is priced in
This has got to be one of the largest (%wise) and longest(timewise) drops without a proper rebound now right?
No. Not at all. It’s ranked 8th largest in terms of percentages at -16.37% and inline with around 6 other corrections that look just like it. Meaning its ranked 8th on the top 10 and the next 5 under it look the same on a percentage basis. the top 13 correction look very similar with 1-4 looking like much larger sell-offs.
The biggest sell-off we’ve seen is Covid at #1 and the QQQ fell 30% in 24-days. That’s almost TWICE as impactful as this one. It would be like the QQQ falling to $375.85 at the lows and then fully recovering within a month or two. It was crazy.
But then we also had March 2022 with the market falling 27.58% over 56 trading days leading into a 24.42% rally. As you can see the size of hte selling generally corresponds to the size of the rally. But think about that. In march 2022, the correction went on for another 24 days pat today. That’s another 5-weeks beyond where we are now.
July 2015 the QQQ fell 26% over 26-days. So a much more impactful correction over a shorter time period. It then rebounded 28% over the ensuing 18-days. again, showing that the rally generally corresponds to the correction size. Imagine the QQQ falling to $400 and then recovering bak to its highs in just 18-days. That’s what happened in 2015.
October 2018, the QQQ fell 23.28% over 59 days. That was the longest correction on record. Granted, in that correction we had 5 legs and 3 of hte legs FULLY recovered the losses. We did have multiple 8-10% rebounds back then. It was just really drawn out because of all of the big swings up and down. So that one was iffy. One could have realistically broken that correction up into multiple separate corrections like we did August 2024 and September 2024.
——-
But the key takeaway right now is that this correction is ranked 6th in terms of duration at 32-days and 8th in terms of size. So it’s in the top 10, but nothing special. It’s not some “this time is different” event.
You can imagine the people of 2018 really believed this time is different. Or the March 2022 investors or the April 2012 or September 2012 or May 2011. All of these correction had more extremes than what we’re seeing here. We had corrections that DOUBED the size of this one.
And guess what? The bottoms of those corrections all FOLLOWED the same exact rules. The rules that we have indicating a bottom is coming to this correction. None of them deviated one bit.
Hey Sam, thank you! And all those occasions had smaller than post 30 RSI usual rebounds as well? I guess that’s what I was wondering about.
I’m still curious if V shaped recovery is off the table?
I’m going to have to go against you on this, Sam. Covid was a black swan — not a policy choice; 2022 was rate-induced — eventually rates plateaued and 2018 was a Fed misstep — reversed by Powell pivot… What we see here IS DIFFERENT BECAUSE:
you write: “the bottoms of those correction all FOLLOWED the same exact rules”
Trump says: “But those rules were forged in the era of globalization. That era is ending. And I’m making sure of it.”
of course, I hope you’re right with your predictions. We all kind of depend on it.
Chris, what did you do differently in managing your portfolio during this period?
Followed the same trades you all did. But I was also highly skeptical of the often used phrase, “it’s not that different, at all.” Slowly, Sam has been sprinkling in subtle hints that it is indeed different in his commentaries and it’s not just market cycles doing what they do. So tell me, with the points I’ve raised are they wrong?
No, I just question why, if you know so much that leads you to another conclusion, why you would enter/exit positions following Sam thesis.
I am just now, seriously questioning it. Before yesterday I’d say his thesis was still somewhat intact. Yesterday changed all fundamentals, and quite irreversible and the fact he won’t acknowledge it is shocking.
Sam and Chris – many thanks to both of you; I think this entire thread was a great discussion and I learned a lot. Please keep it going as you see fit.
my perspective / question – I haven’t seen a correction of this size where we haven’t hit a 30+ VIX in the past. my conclusion of this – sell off is very orderly and makes me think this is a result of a shifting baseline (vs. cycle) hence a bit worried of not rebounding quickly as per technicals. do you have a take on why we wouldn’t hit much higher vix quickly?
having said above, I also believe baseline shift in the other direction is also very easy (trump saying we negotiated great trade deals and most of the tariffs are lifted now) so a really tough place to be.
Thanks, for the record I greatly respect Sam as a person who curiously followed his reddit posts last year and didn’t hesitate to sign up here. He has his technicals down cold, no denying it.
As for your perspective/question…
This. Is exactly what I am saying.
This is a shift in the baseline.
The old rules assumed margin expansion, peace through trade, and liquidity backstops. Now, none of those assumptions hold.
(Additionally, have you seen what China has been doing lately? Those QQQ puts will be valuable as hell when Xi decides to really act. He doesn’t look like he’s playing around.)
And, you’re exactly right — the VIX is low because this isn’t panic-driven selling, it’s an orderly re-pricing of fundamentals due to structural policy shifts. That’s more dangerous than fear, because it means the market is adjusting, not reacting. And when VIX finally does spike, it won’t be from panic — it’ll be from the moment the crowd realizes this isn’t going back to normal.
I personally believe we are in the in-between now.
Trump could reverse course with a tweet, say tariffs are “under review,” and ignite a +6% rally.
This is what makes trading this environment uniquely treacherous — you are not trading charts, you are trading power.
Geopolitical power. Executive decree. Unilateral resets of market reality.
Just my opinion.
Hi Chris — I welcome you to criticize the cycle data, but you have to present a well defined expectation here.
My expectation? we’re going to see a rally the same size of the sell-off. Will we get back to all-time highs? That I’m uncertain off. What I’m confident will happen is that we’ll see a 12-15% rally. Probably closer to 15%.
What does that mean? It means from down near $450, the market is (1) going to rally; (2) that rally will begin sometime in the next few weeks at most; and (3) it will take the QQQ up to $515-520 or thereabouts. After that, we may get another correction or the market may decide to run back to it highs.
if you disagree, then please feel free to outline what you expect is going to happen from here. I’m all ears and we’ll see what ends up happening.
Not even close to true. So far I’ve reiterated that nothing has been different about this correction than any other correction. Go look at all the tables. I posted them for a reason.
I’m now holding anyting back here.
In fact, this very week I pointed out what normally happens when a rebound doesn’t go far enough. That what ends up happening is a 2nd leg lower falls short of its downside target and ends up resulting in a bottom in the correction.
Feel free to disagree, but then outline what it is that you’re saying. It’s not enough to say, “this time is going to be different.” Explain what you think is going to actually transpire here. Because I’m not very clear on that.
I’ve outlined precisely what I think is going to happen. 10-15% rally likely up to around $515-$520 FIRST and then from there we’ll see what happens.
Feel free to explain how you’re going against. What are you suggesting is going to happen here? That the market is going to reach oversold conditions and then what. Not rebound 10-15%? I just donj’t know what you mean when you say you’re taking the other side here.
What is the conclusion exactly? That we’re just going to keep going lower and that this event will be different than the 2008 financial crisis or the 2022 bear market or every other past correction? Feel free to explain what you mean.
Not sure what you mean here. Questioning what thesis? That the market is going to rally? Again, what is it that you’re expecting to happen here in the market?
As a reminder, we can only control what we’re doing here and what we’ve repeatedly stressed over and over and over again. And that is that we’re long 85% in the long-term portfolios. I can’t control what everyone else is doing.
As the Samwise Portfolios are concerned, 10% long Baratheon, 5% long Targaryen and 85% long ANY of Arryn, Lannister, Stark, Frey, Tarly or Tyrell would result in big gains by year end.
Sam — I respect your conviction and clarity in laying out your expectations. You see a 12–15% rally back to $515–520 as the natural mirror of the drawdown, following the same script as past corrections.
But here’s where I go against you:
this isn’t just a correction — it’s a repricing event born from a structural change. That’s why I’m more skeptical, and have put-spreads in place of anymore downside.
Covid was a shock. 2022 was about rates. 2018 was policy miscommunication. All those events had one thing in common: the market bounced because the conditions that caused the fall were either reversed or managed — Powell pivoted, inflation stabilized, or the shock faded.
This time, the damage is policy-driven, intentional, and expanding.
We’re not just facing a drawdown. We’re facing a dismantling of the very framework that let mega-cap tech — the QQQ — dominate. Apple’s margins aren’t simply under pressure; they’ve been gutted. NVIDIA’s manufacturing chain, once invisible and efficient, is now vulnerable and taxed. This isn’t sentiment. It’s reality. And we don’t yet know where the bottom of that repricing lies.
As for what I expect? A bounce will probably come (it certainly does happen even in the worst drawdowns). But if it does, it’ll be weak, short, and sold into. I don’t expect a classic V-shape recovery. I expect a jagged floor, retests, and ultimately — lower prices. Not because of technical exhaustion, but because the macro foundation has cracked, and there’s no monetary or fiscal cavalry riding in.
My conclusion?
This isn’t 2018. This isn’t 2022.
It’s something new. It was plainly laid out yesterday. The new model is irreversible. I also expect more isolationism, and like I said earlier an ever expanding, possibly never-ending trade war…
You aren’t wrong about your method; I believe you are applying it in a moment that may have outgrown the method.
You may be right — and I genuinely hope you are — but if you’re wrong, the consequences will stretch well beyond a missed trade.
You also might have noticed some regular commentators aren’t on here anymore. They don’t trust the thesis, because Sam is discounting the unilateral executive policy completely severing all trade that is crucial to growth.
I mean I could totally see us after a big rally in 30 days and looking back at this and wondering how concerned we were. I can’t see it right now but how could I with sentiment the way it is right now. Emotions right now seem to really get the better of some of us here. I mean all the LT Portfolios are fine, the Trading Portfolios were always risky and if we get a good rally it could recover a fair bit of the losses so far.
Sam has got a lot of experience so I do have trust in what he is communicating here. But of course no one is infallible and in the end we are responsible for our decisions here.
The global tidal wave of blood isn’t sentiment-driven, although it’s undeniably a factor. The entire supply-chain that has generated good EPS for the QQQ has been under a controlled demolition. And factors not even priced-in are retaliation and expanding the tariffs. Recall 1999 and 2007 crashes didn’t start with explosions, they started with dismissals. And I really, really hope to be completely wrong.
This website is “Sam Weiss” buddy. Probably best to take an exit if you disagree so much instead of being “that guy” with the spamming like it’s the comment section of MarketWatch.
Hahahahaha, I love the comment section of MarketWatch. Bring the popcorn.
Nope, I’m a paying subscriber and I’ll have to bring up relevant salient points if the spirit moves me to do so.
You make good points in your other comment, Chris, but I think this one is uncalled for. No need to bring up that others don’t trust the thesis. You’re now just attacking Sam, even though Sam has been very consistent with his strategy by following the data.
The strategy is based on data, and we have to trust the data if we are to follow the strategy. If you don’t trust the strategy, that’s fine.
Let’s continue to discuss the flaws of the strategy without attacking people.
The data-driven thesis is under the old, defunct model. That’s what I’m trying to tell everyone here but for some reason, even with the proof locked in hardened concrete no one agrees.
So what is your forecast exactly? That what? Where is the market headed based on your expectations?
You’ve said the “data-driven thesis is under the old, defunct model.” First of all, it’s not defunct as we still haven’t seen it fail. So far, the market has followed the cycle data pretty closely. Until it actual fails, then you can draw that conclusion. But answer the following:
The QQQ is down 16% in 32 days. What is your expectation? what is the maximum rebound you believe we’re going to see from trough to peak in percentage terms? Why?
The Daily RSI on the QQQ is down to 32.9. A few more down sessions will take it to 30. That will be the second instance of a 30-RSI happening within a few weeks.
What is your expectation? That the market is going to do what after that?
The data suggests the QQQ is likely to rally 10-15% as a result. You’re saying the data has failed correct? So are you disagreeing with that forecast then? If the data has failed, then I assume that’s what you’re concluding right? We’ll come back to this in a few weeks and see.
Sam — I appreciate the clarity of your challenge, and I’ll give you a clear answer.
I’m not saying a bounce can’t happen. In fact, it probably will as I said in the previous answer. Even bear markets bounce — sometimes violently. So yes, I expect a possible short-term rebound of 7–10%, maybe more if short covering kicks in. That’s not a contradiction — that’s acknowledging how markets breathe under pressure.
But here’s the key difference:
I don’t believe that bounce is the beginning of the end of this correction. I believe it’s a pause before a deeper repricing.
You’re framing this entirely through the lens of past RSI behavior and percent drawdown data. I’m saying that lens may no longer be sufficient.
That’s not a rejection of technical analysis — it’s a recognition that the regime generating those signals has changed.
This isn’t a valuation correction. It’s not rate-related. It’s not fear-driven.
This is a structural, intentional, policy-driven shift — tariffs on key supply chains, no fiscal or monetary backstop, and a growing geopolitical realignment that directly threatens the profit engine of the QQQ’s top holdings.
So while you’re focused on what RSI tends to do at 30, I’m worried about what happens when Apple loses pricing power, NVIDIA’s cost base explodes, and no pivot is coming.
We’ll revisit this in a few weeks, and maybe you’ll be right (and I hope my puts become sunk-costs like all insurance policies). But if you are, it’ll be despite the macro conditions, not because they’ve stayed the same.
Let’s watch and see.
By the way, I’m not saying that we’re not potentially in a bear market. I’m saying we’re going to rally big time. After that, we may go down again. We may be in bear market. Or the market could easily rally back to its highs. Those three things are potentially true and it would be really dumb to ignore all three.
Do you know why I’ve shifted to focusing on technicals as guide. It’s not by some weird accident. How do you think I’ve arrived at this point after 25+ years in the markets. It’s because I know that news items can be interpreted in 100 different ways.
I refuse to rely on what I think might be happening with the fundamentals on a subjective basis and I stay away from grand prognostications about the deterioration of fundamentals because the market has made huge fools of everyone who has ever done so.
You should have seen the level of bearishness that transpired in 2008 and 2009 and 2010 as the market climbed. So many people thought the market was going to collapse back down to the lows in 2009-2014. It didn’t.
The fundamental arguments ended up being dead wrong and everyone who stayed long became rich.
Zero hedge would have had you believe that the entire economic system was going to collapse and that the entire stock market couldn’t go higher without fed intervention.
Well what happened after the fed pulled back and raised interest rates? Here we are much much much higher than we were in 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017 when those arguments were made.
There was no mean reversions.The market continued higher anyway.
So what did I learn over the time. The only objective data points we really have is what the market has done on cyclical basis and on what the chart and technical data is telling us. The news and ALL fundamentals are built into that. Market down 4% today is the market telling you how it feels about the fundamentals. Not my subjective opinion. But the markets actual opinion.
Right now the chart is telling us that we have one gigantic ass head & shoulders potentially playing out which could mean we have a huge bear market and crash coming. Not anytime soon. But it’s there.
And definitely not before there’s a right shoulder and a massive 15% rally first.
Once we get that 15% rally, then we’ll talk about what the market can do from there. We’ll stay long and hedge out bear market risk precisely because we can be DEAD WRONG about the head & shoulders, bear market or crash. So we hedge those out and remain long.
If the market rallies, we’re long and make money. If the market crashes, we’re hedged and our hedge will produce more returns for us ANYWAY.
But guess what? The technicals will still tell that very story. The technicals are never going to break down and they never have. they didn’t in 2008, 2010, 2015, 2018, 2019, 2022 or this year. They will tell us the actual story of what the market is feeling and where the market is likley headed. It’s not going to change.
Sam — I completely get why you lean on technicals. You’ve built your system during a time when every fundamental scare — 2008, 2011, 2015, 2020 — was absorbed and reversed. The Fed always stepped in. Supply chains held. Global demand snapped back.
But that was a different world. What we’re seeing now isn’t a sentiment-driven panic — it’s an engineered policy shift. A 54% tariff on global tech infrastructure isn’t a chart pattern. It’s a new baseline.
You say technicals never fail. I say they’ve never been tested in a regime where the foundation is being intentionally dismantled.
You trust price to tell the story. I trust that the story has already changed, and price just hasn’t finished catching up.
If you’re right, your system thrives.
If I’m right, your system lags.
That’s the real divergence here.
I would like to learn more about how the technicals explain what the market is doing rather than trust the panic narratives that are coming to light. I guess senseless commentary is another sign that the bottom is near.
Even if the market sold off way more than expected, Sam has hedged and has explained the purpose for hedging specifically for instances where the market sees a major crash or black swan event. That way long term positions can still profit from the downside AND the recovery of those instances…just like any other major event that has happened over the years.
I think that valuations were crazy high when QQQ was 540. When everything is going great, people don’t really care about valuations. But in the environment we’re in right now, people do care. If we end up getting a soft landing and the trade war is worked out, I think it’s possible we could make new highs in a year. But I’d be shocked if we made new highs in the next few months. I think best case scenario is QQQ going to 500 or so. Then we probably consolidate between 470-500.
So based on your comments, QQQ seems to recover most of its losses after the correction ends, but where do you see NVDA ending up post-correction. It’s been lagging behind QQQ during the few recent green days we’ve had
If the market actually gets going in a real rally, Nvidia will recover back to its highs. it’ll make a push to $140.
It’s only lagging because the market hasn’t really staged a rally. And remember, it outperformed for a few weeks as the QQQ was dropping.
But really, I expect Nvidia will rally back to $140 on a market lead rebound. Especially since it’s holding the $100 line well enough.
Hello Sam,
I’m also aiming for this target, or even $170 eventually, given the AI and robotics projects, but doubts are starting to creep in with these stories of global recessions, tariff barriers, etc. We’ll have to be patient, but Warren Buffet was once again right to be very blunt… Do you have more visibility on the strength of the rally to reach $140? Will we see a repeat of April 2024 to June 2024 with a more than 50% rally on NVIDIA?
My biggest fear is that the rally won’t go far enough. Like yeah we might go back up to yesterday’s price soon, but that’s still down a lot from when the correction started
However, my fear stems from the fact that I bought NVDL the day before the correction started. Bought at 65.63 (NVDA was around 140 at the time). I did average down to 59.58, but despite that, due to the constant red days, I need NVDA to go to about 145 to break even (with some variance. This calculation assumes it goes all the way back up in one day and NVDL goes up exactly 2x NVDA which it doesn’t always do). If we head into a bear market, I’m even more screwed
But for people who were actually smart and bought at the lows when you bought, they’ll be seeing green on a 15% rebound. For all our sakes, I hope the market gets going soon
Hi Sam,
What are your thoughts on the general game plan for our April NVDA spreads and May QQQ spreads?
The expiration for the April NVDA spreads are coming up quick so wanted to understand your expectations for gains/losses and exit plan for that position. The breakeven price seems to be quite far away, is this a position you’re planning on taking a loss on? Perhaps using the cash to redeploy back into the markets?
We still have some time until expiration for the May QQQ spreads; however looking at the correction chart shows us that post correction rallies for similar corrections have taken 15-30 days to play out with 14-18% increase. That would potentially put us pretty close to expiration and OTM so wanted to understand what your game plan is for closing out / repositioning.
Thanks!
April NVDA spreads
So as we mentioned earlier once we sold the $140 calls against our position, our actual trade went down to $85.00. It was a tiny insignificant trade at that point. If Nvidia closed north of $125 at expiration, it would be all gains. If it didn’t, we were limited to $85 or a 0.85% loss. Nothing has changed in that regard.
At this point, it’s only worth closing if Nvidia is able to stage a rally going into expiration.
QQQ Spreads
At this point, the best way to handle the QQQ spreads is to wait for a real snap-back rally because they are very very explosive. Relative to previous correction, there’s a tendency to see a real push to the upside.
If we end up on a big rally, we could see the QQQ trading not far from strike at 10-15 remaining until expiration on the $525-$535 call-spread. That’s where we’d want to close out that position. Just at cross a critical time/price threshold. Don’t here, there’s no value.
As the overall portfolio is concerned, our Baratheon/Targaryen portoflios could still very much end up with positive returns this year based on what Nvidia and Tesla end up doing. If we get a market rally going into summer (July), we can easily see both portfolios in the green regardless of how the QQQ plays out.
That’s sort of how we’re approaching the trading portfolios at the moment.
—-
The long-term portfolios are all solid and will be deep green by year end. Tarly, Tyrell, Frey, Stark, Lannister and Arryn will all be deep green.
This is why we go 85% long-term strategy and 15% trading. For this exact reason.
any thoughts on today’s sideways action of market, Sam?
So since we didn’t get capitulatory numbers this morning — high $VIX and/or high $NYMO — the market didn’t go through normal capitulation. That means rebounding back to the highs beginning roughly 30-45 minutes after the open as we generally see in normal capitulations.
But with the large gap, we’re likely to see a closure of that gap in the coming days. A rebound back up to yesterday’s highs becuase the market abhors gaps of that magnitude. especially on the downside. We can see up-side gaps remain open for a long time given the inherent asymmetry of $0.00 to infinity in the market. Markets can rise to infinite numbers but only fall to $0.00.
As a result, downside gaps in the market are more likley to be filled sooner than are upside gaps.
Every past correction/bear market or sell-off has routinely closed downside gaps fairly quickly.
So that’s our thinking right now. The market is nearly oversold on the daily. We have a big gap. Chances are we reach a bottom in the next few days and then rally back to yesterday’s close at a minimum.
Thank you for sharing your knowledge. I follow other people too on the market. Your comments are always grounded in solid reasoning for your ideas, I appreciate and value the incites. I find them more helpful (and, correct) then some of the others I follow. I am sure that I will spend considerable time reviewing these forum comments in the future to refresh. Again, Thanks.
Sam, this is the first time I’ve commented, and I’ve been subscribed since the early bird subscription cost – so, for some time now. I just wanted to say that I’ve learned so much from you and the team. I have a “for fun” options account that I’ve grown ~310% since being subscribed. This article is by far my favorite one so far… can’t wait to contribute my gains in the near future to the news cycle… lol
There are no bottoming conditions clearly forming. You would be correct Sam, if we are in a bull market. In a bull market people buy the dips. But we are not in a bull market, we are in a bear market.
If people don’t buy dips in bear markets, then why would the market rally 10%-24% several times during the 2022 bear market? Let me show you. This chart shows every bear market rally. We’re not even in a confirmed bear market at only down 15%. This is still a regular correction.
Almost every bear market we’ve seen, the QQQ has dropped 20%+ within the first few weeks of the start of the bear market. We’re nowhere near that even after 32-days. Here’s what we’ve seen in the bear market. notice how people buy the dip regardless of whether we’re in a bear market or not.
This is the full 2022 bear market. I count 7 separate rallies each for 10%+. Two for 20%+
I know but we are in a new market at the moment. This market is just going to continue sell off. The global economy is heading into a recession. We may get a few pops on dips when there is a low rsi sure. But market is heading consistently lower.
Joshua, the market isn’t just going straight down even in a bear market.
that’s literally what just happened
What gives you conviction in a 12-15% rally rather than a 10% rally (which seems to have been the norm in 2022)?
Did you click on the chart above? Four out of the seven bear market rallies went for 17% or greater.
The conviction comes from the multiple oversold instances.
Also, it’s very important to keep a level head when it comes to forecasting a bear market
We’ve had a lot of major corrections and very few ever result in an actual bear market
Everyone thinks that this environment is bear market worthy.
But it’s important to remind everyone that in the last 25 years we’ve had three actual bear markets.
One bear market was the result of the dot-com collapse which lead into 911.
One bear market was the result of the financial crisis after the housing market collapsed.
One bear market was a result of inflation skyrocketing to 9% which was the first time we’ve seen inflation in 40 years.
These are very significant events. At the moment, even with the tariffs implemented in yesterday’s liberation day that still does not rise to the level of damage caused in the three events above.
Tariffs are no financial crisis. Tariffs are not at the same level as 9% inflation. Tariffs do not equate to the re-valuations we observed during the dot-com collapse.
These were very significant events. Presently the market is not indicating to us that it believes tariffs are this big of an issue.
Down 16 to 17% is still very minor. We’ve had several corrections go to that level.
VIX closed at 30, not bad. Another -2% at opening tomorrow and we could be in the capitulation zone, assuming volume. How did NYMO do?
Sam, I know it is most likely that we’re still in a bull market. But hypothetically, if this is the beginning of a bear market, how much lower would it go before we get a strong bounce? I know that even in bear markets there are some serious bear market rallies.
So even if we are in a bear market right now presently, the QQQ is trading about where it should be ahead of its first major rally
The reason we know this is because of how oversold the market is
Both the SPY and the QQQ have reached oversold conditions once already and now this is the second instance
I can tell you that historically, speaking anytime we have seen two instances of overall conditions and close succession like this it generally precedes the first major bear market rally.
It either means that we are bottoming or that a major multi week rally is about to begin.
Like the market does not spend a lot of time trading at oversold conditions.
On top of that, the market has already down about 17% without a major rebound.
So looking both at the size of the correction and the fact that we’re nearing overall conditions for a second time now in just a few weeks, even assuming we are presently in a full-blown bear market, we are now about due for a major rally.
This is relative to previous bear market environments. When comparing to previous bear markets, we are due.
There isn’t much more in terms of downside, and the downside that that we do have can be measured by looking at oversold conditions.
The NASDAQ 100 closed at 32 RSI. That is deeply oversold.
Thanks Sam!
what’s that take today? seems rough out there
Thank you Sam, we really appreciate your analysis.
qqq touched 437 in premarket on friday! capitulation????
Let’s wait to see how we open and the first hour or so unfolds.
I still think ATH in May
Went as low as 433 I think
27.72 on daily 22.78 on hourly
is this RSI?
do we finally have capitulation and NYMO
Russell 2000 and Nasdaq are in a bear market 🙁