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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Sam – I bought spreads with half allocation for $2 a piece. Would you recommend averaging down here? I can allocate the other half.
That’s one of the questions Sam can’t answer.
Remember folks. Sam cannot tell you what to do with your own investments. He can only tell you what he is doing or would do with his model portfolios.
So Sam, have we allocated all of our capital ? Are we just waiting now ?
We’re just waiting right now. Will transition our trades once the rebound happens.
Sam to clarify when you say rebound you mean the bounce back up to 500-510 not the one that goes back to ATH at 540 right?
Apple dip looking juicy today. Do we have any plans to add it to any model portfolios?
I think we have all of our Apple. We may add some to Frey and stark though. For hte other protfolios, they’re ultra long-term. We don’t mess our positions in those portfolios.
When the QQQ drops 3.75% it really drives up the engagement for this site ????. I am not complaining about getting a breather today though!
Any thoughts on AAPL. looks like oversold on hourly,
We bought it in the new portfolios at full allocation at a lower price than where it is right now. It’s obviously a solid long-term investment and we bought it at these levels. we’re happy with our purchases. Apple is oversold
oh, probably missed those trade
Take a look at any of hte long-term portfolios. they’re all there. Our entires were near $220
thanks Sam. would a second leg lower after 500 or so invalidate the assumption stated (that this was an overreaction) or confirm it / keep that intact (even a second leg lower after= overreaction)
Edit: Sorry for the grammatical errors here. I do a lot of typing all day and so I don’t have the time to proofread very often. I’m refining this one a bit as it’s too scatter brained.
No, not at all. You have to understand that markets go through corrections for a wide number of reasons. It’s a time-frame issue. What will prove it’s an overreaction is how far the market goes afterward.
There are short-term considerations—people selling right now because of tariffs, people selling out of fear, and people selling due to purely technical reasons. There are all types of different motivating factors that cultivate in the total short-term loss that gets recorded.
Short-term considerations determine pricing in the near term, i.e., the NASDAQ-100 down nearly 14% in three weeks.
The long-term outlook is determined by the actual economic impact. If the economic impact is real—meaning we actually feel a major hit in the economy—then the market will have longer-term problems. If it’s not real, we recover, go back to the highs, and look back at this as a massive overreaction.
Out of 47 previous corrections, all but a handful were considered massive overreactions. There was no good fundamental reason for the correction because the markets eventually returned to their highs. In 2022, we had a bear market due to inflation. In 2020, we had a crash due to COVID, which was swiftly reversed weeks later. That means even the economic impact of COVID was seen as negligible in the grand scheme of things. We ended 2020 much, much higher than where we entered the year.
That’s the point.
Having a second leg down could be due entirely to momentum. It has no bearing on the long term.
There was no good fundamental reason for the correction because the markets eventually returned to their highs.
I suppose it begs the question of whether these tariffs announced daily and geopolitical realignments (voting with North Korea in favor of Russia) are actual fundamental reasons for the correction.
hi, someone’s help please.
on ibkr app placed a buy to open qqq may 16, 2025 $525 -$535 call spread $2.00×5 contracts
but haven’t been filled ( limit order). I’m making something bad ?
Call them. By the way, that spread is trading way below $2.00. I would call and talk to your broker.
Generally speaking, putting a limit order to buy a call-spreads at a price point that is way above current market value is a bad idea. The market will fill you at a very very high price and you’ll start off the trade deep in the red. Call your broker.
Also, before trading options, I’d do paper trades only to get a deep understanding about how they work before making any live trades. Talk your broker.
thank you Sam, I think I did exactly what you suggest on the targaryen portfolio. you suggest buying call spread with the market order type ?
Hi Sam,
We’ve talking about the NYMO more lately, understandably so for all the reasons you provide above. Are there any other uses of the NYMO? Why is -100 the magic number? An example of what I’m thinking about here is akin to how we use the RSI mid-line for rebounds. Any information on additional ways YOU use it would be quite instructional 🙂
Thanks!
It’s the oversold line for the $NYMO no different 30-RSI.
+1 to ‘The trading portfolios have been a tremendous distractions from what really matters here and we’ll need to figure out a better balance when it comes to that. Once this correction ends, we may move to a less active approach as it’s taking up 95% of our time when our time should be spent on the long-term portfolios’.
We are all literally focus 90% of our power/time with 15% of our money. I really prefer Sam continue to write other articles to help with strong foundational knowledge.
But what is there to do with long term portfolios? Once we find an entry point, it’s a set and forget for like 2 years. Not much to do day to day.
This is true. Though we do active hedging. we just need to remember to do it and for people to not lose sight of what we’re trying to accomplish long-term.
Also, the thing that worries me more than anything else is people over allocating toward a trading strategy instead of the long-term strategy. The long-term stuff will produce massive returns and if hedged property, will be protecting against any sized downturn.
those are the two big problems.
(1) The temptation to overallocate to trading — big mistake.
(2) Making sure we keep the long-term investment analysis front and center so that we make our micro adjustments during corrections and rallies.
But what is there to do with long term portfolios? Once we find an entry point, it’s a set and forget for like 2 years. Not much to do day to day.
I am all for Sam finding balance but the last few weeks have been a fascinating learning experience. Focusing on our long term investments and general knowledge of the market is of course extremely valuable but the short term trading is simply more intriguing and fun. Would hate to lose too much of that moving forward.
Yes but also, remember long term stuff is much easier and most should be able to make sound long term investments without hand holding. Not saying they do, but the trading is much more complex and warrants the extra effort.
Sam – you wrote this “Also, if this leg down continues and gets any deeper, we may start to consider selling puts against our long puts as a way to further reduce basis.”
You mean gets deeper after the rebound or now before the rebound?
To be honest Targaryen kind of feels like Baratheon 2.0 during the correction. In my mind Targaryen was: buy during corrections when the market has bottomed (example: at the same time you bought your positions in stark and frey).
So i’ve also been surprised by all the trading, but i’ve also been having alot of fun
I appreciate the trading vs investing mention, as a new member I definitely got confused and wish I had joined before this correction. I’ve been playing catch up and my portfolio is more exposed than I’m comfortable with, as a result. That’s on me. I didn’t digest the way these portfolios are working correctly. Thought I did. Thought wrong.
I am new and curious whether you will start another long term portfolio
He has stated that he will keep launching portfolios. In fact, if this correction has a 2nd leg to it after the rebound, it is possible that some long positions will be added then.
Sam are you suggesting 500 is the near term top before it goes down another leg? I’m also confused by the comment that it will run to 500 in the next few weeks. If the correction is near bottom of this leg, the QQQ can be at 500 in a few trading sessions.
^ Was also wondering about this. Are we expecting the rebound to 500 to be done in a few trading days or weeks?
Sam, thanks for all your updates especially during recent correction days. Your last paragraph mentioned taking a 5% allocation on TSLA in the long term portfolio. Do you also consider taking some allocation in Baratheon? I’m currently holding the TSLA July spread and wonder if you’d consider a May spread might be more profitable once TSLA settled which should be very soon? Or even a straight call?
Sam, what is the reason that in the July 2024 correction, you broke out the move down from 7/11-25 into two legs, with the cutoff being the 2.2% rally (using the lowest/highest point of the daily candles) between 7/19-23? But in the current correction, you counted everything as one leg, and didn’t break out the 2.5% rally between 2/27-3/3?
I’m comparing the two corrections to evaluate the possibility that this current correction might go to -15.9% like the July 2024 correction did. If I’m understanding correctly, one of the reasons is that this correction has been a single leg, so it’s unlikely to go as deep. However, if we change the count a little bit, by including the mini rally between 2/27-3/3, could an argument be made that this correction has also been two legs, and thus has the potential to go deeper?
I’m sorry which table are you referring to? Are you talking about the “Correction Table?”
In July, we counted it as all one single leg. And the rebound we had in July was a lot larger than 2%. The QQQ rebounded 4.9% from $452 to $474 over 5-days. We hadn’t seen 4.9% rebound liek that. the closest was 3% and it didn’t last even 1 session.
The July – August 2024 correction rebound can be seen on the daily as two legged. This one can’t. It’s one continuous leg.
Often what separates a correction Ito multiple legs id the time factor. If teh market spends 5-6 days rebounding, then we count that as a separation. That’s particularly true if the rebound goes for 5% like that.
It would be like the QQQ rebounding from $468 all the way up to $492 over a 4-5 session period of time.
I’m referring to the -15.9% loss (4th row July 10, 2024 Top) in the QQQ Correction Table, and the daily briefing post on March 10, “Corrections & Rebounds: A look at Previous oversold rebounds.” On that post, there were 3 Correction Down Legs for July 2024. When I look at the charts, between the Leg 1 of -29.49 and Leg 2 of -30.19 that you have, was the 2.2% bounce between 7/19 to 7/23.
I guess what I’m trying to understand is, what is the possibility that this current correction can go -15.9% like we did in last July’s correction? That would take us from 540.81 to 454.82, which is another 19 pts away.
Thanks much!
“However, if we change the count a little bit, by including the mini rally between 2/27-3/3, could an argument be made that this correction has also been two legs, and thus has the potential to go deeper?”
The correction isn’t two legged by virtue of the fact that there hasn’t been even a small break in the selling. The biggest factor is the time element really. It’s when the market pauses and rebounds for a full week. Where the bleeding stops and everyone wonders if the correction is over. We don’t have that here. If you open up a dialy chart and go back several years and you can easily tell the difference between the multi-legged corrections and single legged ones. this is one distinct leg. There’s no wiggle room at all.
Let me show you:
Thank you. I understand what you mean now.