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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Although NVDA may not visit the low $90’s again, will it drop down to the $100-$101 range again?
That largely depends on the CPI print and whether the markets ends up sustaining another leg lower. So as I mentioned on Sunday, we have tools that can forecast when a bottom is in. Those are RSI, VIX, NYMO and a few others. What we can’t know for sure is whether the market will just prematurely bottom. What we’ve seen happen at times is the market will just randomly decides its had enough and then randomly reverses course.
That occurred last November, for example. We had no indication that a low was in at $341 on the QQQ. The market just randomly decided to bottom on a slow low volatility day and then it slowly began rallying until the momentum really ramped up.
Now this is the rare exception obviously. Normally, we don’t just randomly bottom like that. We typically need to see momentum shifts, oversold conditions and a host of other things first.
So when thinking about this from a probability point of view, then yes. Nvidia is very likely to retest $100 again before it bottoms. It’s now a bit less likely to see $90 though given the size of this rebound.
But the base case; what we expect to happen is for the market to sell-off on CPI tomorrow and into next week. And then as we head into the fed meeting on Wednesday, there’s a good chance we hit bottom there. The fed has a tendency to cause a trend change.
So that’s our expectation right now. For the markets to bottom out early next week and then to begin rallying on the Federal reserve cutting interest rates.
Chances are Nvidia sees $100 or lower.
Got it. Thank you for your reply.
(or drop down to the $99-$100 range again.)
Really surprised at the current difference in performance between AVGO(who had a worse forecast for earnings) and AMD (who basically reset the way they are building for AI yesterday) are outperforming NVDA…..well they probably aren’t its total volume and all of that but percentage gain wise AVGO (which I also own) and AMD (which I do not) are more than trippling NVDA’s current performance….just surprising.
AVGO is undergoing a very common earnings trend I’ve seen over the years in tech. I talked about it a little bit as we headed into Nvidia’s earnings. What often happens after a big gap up or gap-down on earnings is you get a full reversal and gap fill. This happens in both directions.
Sometimes you’ll get a stock that gaps up big time, trends higher for 2-3 days and then sells off to fill the gap. Other times you get stocks that gap down big time, sells off to oversold conditions only to bottom and the fill the gap.
AVGO is just following that trend. I posted an update about it above.
I don’t get it, why would the market rebound be over. Isn’t the rebound just getting started. We have only rebounded 1-2%, the previous rebound was much higher.
Because the market has not yet seen the bottom. Any rebound before hitting bottom should be short-lived.
@Josh:
So I’m talking just near-term. This entire correction will likely be over by the middle of next week. So we’re not talking very long time-frames here.
Though I should say the trading action during the second half of today’s sessions is a net positive for the bull case. It means that there’s a good chance for a full blown bottom to be put in on tomorrow’s CPI print if the market reacts super positively to the report.
But even with a bad reaction to CPI, today’s move up was sufficient to make the overall downtrend weaker. Meaning, we’re probably A LOT less likely now to see the August 5 lows.
If the QQQ ends up pushing into the mid-$460’s tomorrow, then I’d be very confident in our overall picture laid out over the weekend. A push into the mid-$460’s basically puts a dagger into the bear case.
Even if the QQQ were to sell-off again going into next week’s fed, it would be shallow and short-lived.
Overall, the bulls are in very good shape here and there’s a path for mostly positive outcomes over the next 6-sessions (CPI to Fed Interest Rate Decision).
Sam, should I assume that if QQQ does hit mid-460’s tomorrow, then it’s time to load up NVDA at that point?