Samwise Quick Reference Handbook
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Any thoughts on Nvidia? Can we be expecting a large pullback or the standard 3-5%?
Well Nvidia always pulls back a little more than 3-5%. That’s what the QQQ does. Nvidia generally falls by 7-10% anytime we have a segmented pull-back on the QQQ.
When the market finally tops out here in the next few weeks (maximum), Nvidia is in for a much larger pull-back of 20%+. It’s likely going down to $140. That’s where we’ll probably do our buying back of our Nvidia calls we’ve closed out.
SPX levels broken
QQQ already at midline on the hourly
Powell nuking market?
Hi Sam,
In the past you’ve mentioned these expected near term pullbacks are driven by retracement cycles. The most common % thrown out is 3-4%.
Is this 3-4% figure purely based on your segmented rally analysis tables or does a 3-4% retracement of a 8-10% segment represent the 61% fib retracement level and that’s generally what we see when performing technical analysis? Or maybe they’re both confirming the same thing? Hopefully that makes sense 🙂
Thanks!
Fib retracement totally works here. I’m just going based off of QQQ history. With Fib retracment what you can generally expect — and this is mostly true historically — is that every rally retraces half of its gains at some point.
So for example, we bottomed at $401.50 and let’s say we topped at $603. That’s a $202 rally. We should see a $101 loss in the next correction. So $603 down to $502. AT least that’s the theory.
Now here’s what I have found. On a long enough time-line, this is almost always true. If it’d doesn’t happen, now it WILL happen later.
Here’s what I mean by that. Suppose the QQQ pulls-back to only $530 a share on this correction and then goes on to rally to $725 a share down the line. The theory goes, well since the 50% retracement between $400 and $600 never happened, it’s going to be $400 to $725 or +325 / 2 = $162.5. That means, we could expect the QQQ to fall from $725 down to $562.50 in a future 22% correction.
If you go back and look at the QQQ chart, you can always find a 50% retracement of every rally. At some point, it always comes due.
IN MOST cases, every rally sees an immediate 50% retracement of the gains on the immediate correction and it doesn’t happen, it will happen in the future. It comes due.
For example, if you go back and look at the November 2023 to March 2024 rally, that rally only saw a 38% retracement and just barely so. Guess what? The next correction failed to make it up, but it was made and then some on the most recent Feb 2025 correction down to $401.
November 2023, the QQQ bottomed at $339 a share and rallied to $446. It never retraced half the loss. Instead, the QQQ continued higher to $500, sustained a correction down to $423 — which also didn’t clear — before rallying to $540 and ultimately sustaining the 50% retracting the November 2023 $339 to Feb 2025 $540 gain. From Nov 2023 at $339 to Feb 2024 at $540 is $201 points. A 50% retracement of those gains would be -$100. The QQQ fell $140 down to $401. That’s more than 50%.
Every other rally in the current bull market era saw immediate 50% retracements. For it to happen here, the QQQ would need to fall to $500 a share essentially. Very possible.
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You can apply this to segmented pull-backs as well. If I went back and looked, I bet most segments retrace half hte gains. Not always, but very often that’s probably what’s going down.
Just a little bit of red and those QQQ put spreads respond. Could go for some more of that.
Hi Sam,
Question about your reference to average bear market interval.
Where/how are you deriving this interval from? The last bear market was in 2022 (right after the COVID rally). The bear market right before that was the financial crisis bear market in 2008-2009. Next up, the dot com bubble in 2000-2002.
The time delta between the 2022 bear market and the financial crisis bear market seem to be pretty far away. Am I missing a bear market in between somewhere? Just trying to see where you got 5-7 years 🙂
Thanks!
So it goes back to World War II. It’s a general understood fact. The business cycle lasts 5-10 years on average and the market generally sees a bear market on 5-7 years on average.
While there’s a major gap in time between the financial crisis and the true bear market we saw in 2022 — 13-years almost — before that point, we’d seem them with regularity.
Also, a bear market is technically defined as a 20% drop in the S&P 500 from peak to trough. We’ve seen that occur a number of times between 2009 and 2022. It just didn’t seem like a bear market because it didn’t progress over time. It happened fast. Liek the Covid crash for example. That was a clear-cut 20%+ drop in the S&P 500 from peak to trough. Some people straight up count that as a bear market. But being only 3 weeks long, it’s hard to view it that way.
2015 to 2016 was a bear market in the QQQ. The market didn’t make new highs for a whole year and the QQQ had fallen 27% at one point.
But the typical average is 5-7 years going back to World War II.
In the past, it used to follow the business cycle to some degree. You get rapid expansion, a slow down, a peak and then a recession. That’s generally a 5-10 year cycle.
Well fingers crossed this is day 1 of the correction, with average length of 20 days to the correction bottom those Oct. 17th spreads could work out.. though I think I should just assume the markets gonna screw around for another month
So I think for the Oct 17 spreads, we’re probably going to drop them on the segment pull-back. If the QQQ falls to the low $580’s we’ll probably close them out and wait for the rebound.
@smiley hopefully this helps a bit with your blue balls????????
????
Sam,
In short: we’re sitting on a bomb. The current structure resembles a classic bull market top, with either: a double distribution top (600 → 550 → retracement → fall), or a direct top (as in 2020) → crash without warning.
1. Probabilities (current reading at $600 QQQ)
a. “Classic” correction –8% ($550) + rebound = consolidation top
Probability: 45%
This is the preferred scenario for mature markets at the end of a bull cycle: moderate correction, deceptive rebound, distribution.
b. Broader correction –15% ($500–510), without a real rebound
Probability: 35%
Typical end-of-segment scenario: ATH → direct crash (February 2020, July 2024).
Extreme RSI + unfilled gaps reinforce this risk.
c. No significant correction (QQQ consolidates only –4/5%, then returns to a sustainable ATH)
Probability: 20%
Possible only if macro catalysts are very favorable (ultra-dovish Fed, explosive earnings, liquidity surprise).
But much less likely because the market has already delivered its “bull market objectives” (140% from the low).
2. Expected Timing
Risk Window: Now → November 2025
Historically, QQQ corrections begin in just 1 to 3 trading days after a peak (see 2020, 2024, February 2025).
In other words, the top at $600 can be followed almost immediately by a violent bearish gap.
$550 Zone: Achievable in 1 to 2 weeks after the peak.
$500–510 Zone: Achievable in 4 to 8 weeks if the breakout is clear (November or December 2025).
Extended Scenario (consolidation, rebound at $590–600): Distributes until Q1 2026 before the true bearish leg.
this bear trap is crazy
Hi Sam, QQQ has only pulled back about 1% but is nearing oversold hourly. Would that typically lead to a small bounce off oversold before the pullback continues down a total of 3 to 4% or would it ignore oversold in a situation like this?
So I think we can get down to -4% before we’re at deeply oversold becuase it doesn’t typically just go straight down. We’ll have a few hours of consolidation here and there that slows the RSI’s descent. The last three larger pull-backs followed the same pattern as we’re seeing right now. We shouldn’t get down to the low 20-RSI on the hourly until we’re nearing $580 a share (-4% mark).