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Do you have any thoughts about Apple’s trading action? It seems to be underperforming the market.
Apple is underperforming as it continues its downtrend. When that ends, it will go in the exact opposite direction and begin outperforming. In fact, we’ll like see a huge surge that lasts several weeks. Take a look at the attached chart. Expect someting like this:
Do you think BOJ decision is priced in at this point or could it potentially have a big impact like back in August or September again if announced next week?
It’s priced in already. What isn’t priced in are surprises. If they do anything different than what is already expected, then we get a rally or sell-off commensurate with the surprise.
The July-August sell-off involved a lot more than just the carry trade. There are literally millions upon millions of investors making decisions of any number of different reasons.
The volatility we saw in July-August was due to a wide number of different factors. We focus on the technical picture because that technical picture draws in ALL DATA points. It’s expressed in the chart and indicators itself.
For example, note how the month of January transpired. We knew in December when the market was climbing that the rally would go no later than late January. We were approaching that 100-day mark in the cycle and the market underwent volatitly right on que. Whatever the fundamental reasons, the trend told us ahead of time we’d see volatility.
Well we’re now in a place where volatility is nearing an end. we may get another leg lower. but as we noted yesterday, the typical corrective period goes no longer than 28-days in MOST cases with worst lasting 41-days. So chances are in the next few weeks, we’re beginning a full blown rally. And if not a full blown rally, at least a 10% move up.
That’s what history has shown us. The QQQ likely sees $550 between now and late February and worst case by late March (if we’re on a more delayed time-frame).
Sam, any thoughts on putting in hedges or selling some of the long positions in Baratheon to take advantage of the potential pull-back?
I thought about selling covered calls, but they’re not valuable enough and Nvidia has not gone far enough. Next Friday’s $140’s aren’t worth enough yet.
Right ow, we’re sitting on 75% cash in Baratheon. If the markets pulls back as expected, we have that cash to put-on follow up trades. If the market rallies, we have our small long positions which need to drive our profits. We want to be long and fully capitalizing on Nvidia’s move up to $150 if that’s the direction the market goes next week. That’s because a move up to $150 is going to produce 80% returns on our Nvidia long position
Alternatively, if Nvidia moves down next week, we’ll be able to put on the spread trade. We’re nearing the end of the down cycle and so we’ll wait. if we were more heavily long, we’d put on hedges.
See Apple update at 3:15 PM.
Hi Sam, What do you see happening with NVDA this week?
(Jan 21, premarket) So, AAPL is going to open significantly negative again. The options will be much cheaper : should we double-down to average down our cost?
P.S. AAPL notation have been downgraded by a few analysts.