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...
Please login to view this page.
Sam – “could push Nvidia up to $122 before leading into a larger pull-back”. Larger pull back meaning 3rd leg down? I thought I read the odds of that are lower now given yesterday’s outcomes? Thanks as always for your guidance!
May have meant the pullback would be at the same $103 shoulder level if NVDA had gone to $122, which would be a “larger pullback” but to the same level indicated on the chart.
So we can easily see the market rally to a certain point and the sustain a sharp pull-back that falls way short of the lows before ultimately heading higher.
Think back to August/September. The NASDQA-100 (QQQ) reached a low point of $422 a share. It then rallied back up to $486 in a few weeks. It finally pulled back one last time to a low of $447 in September before ultimately rallying to $540.
Well we could easily see something like that here. The market could rally to $500, pull-back to $440 and then rally back to its highs.
In that scenario, Nvidia could form its IHS patter. Rally to $122, peak, pullback to the low $100’s before finally bottoming for good.
QQQ is now down 6% would you still consider this a normal trace back?
Yesterday was second most daily gain of the NASDAQ ever, today it drops 6,5%, the market‘s just behaving like a memestock, I sure hope this wasn’t the rebound before a leg lower..
I think the fear has dropped substantially. Trump showed us he hasn’t lost his mind and is willing to be reasoned with. It may be a rocky road but at least we pumped the brakes and veered away from the cliff a little.
and then there is the VIX skyrocketing…
Still totally normal because of how large the move was.
In 2020, for example, we had back to back to back 10% swings up and down
It’s going to take a moment for the market to normalize again
Basically, since last Wednesday, we’ve gone into a sort of high volatility phase of the market where the trading ranges have expanded beyond 5% per day.
No different than what we saw at the lows in Covid or during the lows of the financial crisis. We’ve seen this action before in about five or six different corrections going back to 2003.
What happens is you’ll keep getting these bigger and bigger swings until eventually the market sort of slowly normalizes.
To get a sense of how this works, you should go back and open up the chart and look at the Covid era and see how long it took
I think we spent something like eight or nine sessions in this sort of high volatility phase, and it was all in the same zone.
Meaning the market didn’t go substantially higher or lower. It just swung big in both directions until ultimately it went into a V recovery.
We may be seeing that right now. The good news is this normally happens right at the bottom.
We don’t normally get high volatility phase followed by trending lower
It usually just straight bottoms the market.
And with yesterday‘s big shift in tariffs, we’ve basically bottomed fundamentally speaking.
I was sort of hoping we would get a gap and run today, but what we’re seeing is definitely one way to go.
Thank you Sam! Yeah I was hoping for the same, every rally seems to be a real fight these last months
Your chart shows NVDA going to 103 over the course of a couple weeks, but it got all the way down to 103 (and one cent, not that that matters) today. Does this change your outlook on it?
Yes. This.
No. What I’m talking about takes time. It’s not enough that it just drops down to $103 and then returns. To form an inverse head & shoulders, you need time for the pattern to actually develop. High intrahour volatility isn’t good enough.
So the outlook is still going to 476 to fill the gap in the very near term (Nvda possibly 122) then a larger pullback like sept 2024 (Nvda ~103) then rally?
Hey Sam,
A lot of the MAG 7 report earnings in 2 weeks. If some don’t go well, do you think that will slow down the rebound process? Could you see it leading to another leg lower?
Possibly. That’s a potential issue. Though I think with everything down so much from their highs, we’re more likely to see stocks rally after earnings.
One concern we could come across is if company’s start reducing guidance due to tariffs. That could be interpreted poorly. But at the moment, not sure that’s likely to happen. Especially with the pause.
We will see TSMC results soon.
I think it will be great like last Q1.
Banks will start reporting earnings tomorrow. it will be interesting to see how they react to earnings. That may set the tone for earnings season for other sectors.
“Ideally, what we should see next is an eventual next leg up to $476 to fill the gap with that rally starting later today.”
Hi Sam – Considering QQQ touched 433 and is seemingly ending in the 445-450 range, would this constitute the beginning of said rally? Certainly doesn’t feel explosive