Samwise Quick Reference Handbook
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Thanks for the quick reporting, Sam.
Hi Sam, for Baratheon and Targaryen, are you only considering QQQ and NVDA as potential trades? AAPL seems to be near hourly oversold, any consideration of trades on that ticker?
Apple doesn’t look great at the moment. It hasn’t really followed the market as well as other stocks have. Apple has formed what looks like a potential double-top at $215 with a neckline at $193. Got to watch it more. Chart-wise, it doesn’t look great. It is deeply oversold right now, at a 27-RSI. So there’s a potential trade there. But with the QQQ not oversold just yet, we’d have to wait.
Really, trades have to wait until we’re confident the entire QQQ has bottomed.
Hey Sam, you mean bottomed for this pullback? Or are you doubtful in a longer term sense for the QQQ?
So we’re talking only near-term here with the QQQ. Long-term, we believe QQQ is on a new intermediate-term rally. In fact, it’s clear that it is. The QQQ is up 30%. There’s no stronger evidence than that.
our expectation for the QQQ is that it will test all-time highs on the next leg up once this segmented really pull-back ends.
We expect the intermediate-term peak to happen right near $560-$570 a share and from there the QQQ will sustain a 12-16% correction. Most likely what happens is $560-$570 peak with a pull-back to $490 a share.
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My comment was merely pointing out that the QQQ likely hasn’t bottomed yet on a near-term basis. Our expectation near-term is the QQQ comes down to the low $500’s first.
And so we’re waiting on making trades on stocks like Apple until we get a proper pull-back on the QQQ first.
Are you thinking about the 530-540 spread for July 18? It should be in the 2.60 – 2.90 range once QQQ is in the low 500.
On a different topic, regarding the technicals for UNH, is the 50%+ sharp drop mostly sentiment based? (Just like how CrowdStrike tanked last summer then recovered and push to a new ATH).
While there are some factors for its downward pressure:
◦ They missed their first earnings after a long streak of beats.
◦ Their forecast was lowered.
◦ CEO uncertainty.
◦ Etc.
The drop in value is over 50% from its highs seems like an overreaction for a company doing very well for years. UNH adheres to its daily being overbought and oversold in the past (very recently a ~30.5% bounce after oversold on the daily).
Yeah also curious, RSI of 27 on the weekly, seems like it should bounce????
Hi, Sam.
Given that QQQ has fulfilled the expected 3-4% pullback. If it starts going up to retest all-time highs from here, wouldn’t that apply upward pressure to Nvidia? Do you still expect Nvidia pullback 12 points/oversold “inevitable” even in that scenario?
Do you expect QQQ and Nvidia to be desync, where QQQ goes up and Nvidia gets a delayed oversold pullback in that case?
So while the QQQ fulfilled its expedited 3-4% pull-back for the segmented rally analysis, it hasn’t reached oversold conditions. Those are two separate things. The QQQ is due for an oversold pull-back. If it doesn’t happen here, it’ll happen soon after going back to the $520’s.
The QQQ needs a nice clear-cut oversold sell-off and test of $500 imo. Anything short of that likely delays the inevitable.
Nvidia is in the same boat. It’s due for an oversold sell-off. If it doesn’t happen here, it happens after the next push. And the next push is likely to be tepid given the lack of pull-back.
Nvidia’s upside is very limited until it sustains a sharp pull-back. Even if Nvidia pushes up to the $140’s on another surge up, the overall move would be ripe for a sharp pull-back like every other previous rally.
So I’m not overly concerned about Nvidia or the trade set-up we’ll soon have on the stock.
That makes sense. Thanks for the swift response.
June 2025 or 2026 puts?
About your 1:57 update: have you meant June 2026 puts, or really 2025 as written ?
Hi Sam,
You’ve mentioned multiple times now that hedges are meant to protect against 20 – 40% corrections. Does this mean you’ll only make transitionary trades (closing hedges to go long) during corrections like the Feb 2025 correction?
Assuming the magnitude of the next correction is more “normal” (i.e. 10-14%) do we plan on making similar transitionary trades at key moments (-100 NYMO, elevated VIX, etc.)?
Thanks!
Yeah, he only takes the hedge off in capitulation, where all indicators point to bottom, and the market has sustained a massive drop. 8-12% correction isn’t enough to take hedges off.
Hello Sam It’s still strange to see that, session after session this week, NVIDIA is falling until it reaches a bottom, then recovers and struggles until it either doesn’t fall at all or ends up slightly down… Do you have any rational explanations for NVIDIA’s resilience and combativeness? Is this a sign that it will give up when the CAE financial statements are published? Historically, I don’t seem to have seen NVIDIA exhibit this behavior for more than eight sessions.
Hey Sam,
I know this question might be a bit early, but considering you’ll be starting another model portfolio at the next correction bottom (around $490), would it make sense to put some hedges in place in advance at the intermediate-term rally peak (around $570-$580) so that the new portfolio doesn’t start off unhedged while bear market concerns still linger?
I think you did something similar for Stark.
Hey Sam, know we spend most of our time on QQQ, but does the same analysis generally apply for SPY? For example, if we hit oversold, do we expect it to react it in the same way? Are there any differences between how the two behave?
This is the type of stuff that I think gives Sam pause.
Sam does not ever recommend taking short positions. The risk is far too high, market can simply explode higher for one.
I am not gonna get into all the reasons why this is ill advised other than suggest that you’re blindly enter trades relying on Sam’s analysis as the rule so to speak.
His analysis is just that. If it was the rule, then he wouldn’t be here, he’d be levered to the max doing OTM calls, short dated, high strike etc.
Sam’s analysis is solid, but he’s been wrong several times. By wrong, I mean doing stuff like this could easily fail. Overall his analysis is outstanding, but is not designed to be used in this way.