Samwise Quick Reference Handbook
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Sam, with SPY making new highs, are we officially counting the rally at day 100, or waiting for new QQQ highs before declaring it? Just curious how this plays into the correction timeline, since today would be day 10-12 something like that, if we were going off day 89.
Also, how does it play into the short positions, and the plan to exit the Sept shorts specifically? There is definitely still time to profit, especially if an explosive downtrend happens in the next few days.
Also of note, we are now 1% of ATH!
So with the SPY reaching new highs, the rally as a whole has reached Day 100. The QQQ hasn’t. It’s at Day 89 still as of right now.
We have to go back and look at the Spy specifically to see how significant Day 100 really is for the SPY. The SPY is substantially less volatile than the QQQ. So I’m sure this exact scenario has played out before where the rally lasted longer on the SPY than it did on teh QQQ technically speaking. Same with corrections.
But I think practically speaking, it doesn’t really matter all that much. The impact is still the same regardless.
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As our positions are concerned, so with Nvidia, we need the correction to start ASAP for those to have value.
Once it start, Nvidia can easily drop 25-30% inside of 10-days. It has done it multiple times in the past. So we can see Nviida fall from $180 to $140 within a 10-day period of a correction. It’s just a question of when it begins.
We saw Nvidia go from $140 to $105 in 12 days in March for example. That’s 25% in Just 12-sessions. We saw it go from $130 to $103 in 7-days in September 2024. The same move in 11-days in July-Aug 2024.
The point is we’ve seen it happen multiple times. So correction start date really matters here. We have 15-days until Sep opex.
Once a correction starts, it goes really fast.
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For the September 29 put-spread, a correction starting anytime in the next week or two would put those in position to perform. Notice that the QQQ falling within $10-$20 of being in the money mid-correction would probably put the Sep 29 at even and the October spread at deep green.
The key there is to try and exist the Sep 29 at even and produce our returns on the October spread.
As of right now, the longer this stalls out, the more likely it is that the October $550-$540 ends up in the exact right position — which is in the money as we approach expiration. That’s where we want to be as that will get the Oct spread close to $8-10.
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There’s urgency for the Nvidia puts. Some urgency for the Sep put-spread. None yet at all for the October put-spread and the October put-spread would perform better if the correction starts in mid-September.
We do want to add a third position in another October spread. Ideally, if we add a third, then even if the first fails, the 2nd and 3rd would far outstrip the losses on the Sep 29 spread. We’d be 6% long oct spread and 3% long Sep spreads. We might take a $1 hit on the Sep spread and could potentially make $5-7 on both October spreads. So that’s why we’re now a lot more interested in getting that third position.
Hello Sam
Is there also a likelihood of seeing a decline of more than 30% to reach the $125 support level, or are you still holding onto the $140 support level?
Will the rebound be as strong, or is a consolidation phase like in 2023-2024 more likely, given recent trading?
Is a strengthening in NVIDIA and NVDL on the cards, or do you still expect a price below $140?
There’s a likelihood for anything to happen, but as Sam’s said before, it’s unlikely for another super long long consolidation period/huge correction given that we just had one somewhat recently
No way would I have thought we would be cutting it this close again with our September spreads after that last correction already screwed our Spreads…
Ikr, Sam and the market is putting us on an emotional rollercoaster. Just as Sam said : “You will see -80% on our spreads, then x3-4 after”
Tbh, the way I see it was the trade was placed knowing that there is a risk that it would be lost but the probability was in our favor but that the Sam-Weiss portfolios are generally net-long, meaning 90% of the portfolio is long and these spreads were at best to be profitable and at worst, the cost of insurance.
Unfortunately, if anyone was net-short, these analyses would have cause quite a ruckus. Just my 2 cents.
Yeah this wasn’t a complaint or anything, it’s just 10% so it’s fine!
But it’s still noteworthy that we were extra cautious with expirations especially after the last correction lasted longer and it’s still not enough. It really underlines why trading is so inferior to longtime investing..
can you pass me the oil @smiley ?
Controling selling pressure, wow. These HFT fund are good at it huh ????
“during first day of correction we will see big drop and RSI reaches deep oversold easily.”
That’s not true, if this is the correction, we are on day ~10-12 at this point.
3rd position doesn’t seem likely, this sure feels like the start of the correction. Between the time, the returns, the action, and fact next market day is September it feels like the start. My gut tells me it’s going to be violent too.
Be dope to break 560
That NVDA dump looks savage sitting right at it’s uptrend support.
Did anyone get the daily briefing? it didn’t update from yesterday
Nope and I was really looking for to it today.