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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Hi Sam,
Apologies if I missed it in previous briefings, but what is the significance of $551 from a technical perspective? Is that the % drop that qualifies the move down to be the start of a correction?
Thanks!
551 has become significant because it is the low of the segmented rally pull back.
If we go up and test 575 failed to bake through and then come all the way back down to the segmented rally lows, that move is significant.
There’s nothing significant about 551 per se. It’s that it just so happens to be the lowest point we reached last Friday
Seeing -20% yesterday and then +20% today on the QQQ put spread is crazy
Hard for me to really comment on it because I don’t really trade the SPY at all. You have to consider the max return on the spread and run through a full historical analysis to determine how far the S&P is likely to go on a correction. It requires a fully independent analysis.
We trade the QQQ specifically because there is more volatility. But I haven’t done the same exact analysis for the SPY to determine min/max on corrections and things of that nature.
The return rate is really important. And so is getting the high probability average correction correct. For the QQQ that’s 8-10%. 8% in a small correction. 10% in a standard correction. For the SPY it’s smaller, but it’s not always obvious whether that is reflected in the option pricing.
Sam, Is today’s daily briefing posted yet? I got an email that it was, but I’m not seeing it yet.