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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Sam, do you use Bloomberg?
Adding puts?
10/17 Q’s just expire, right
No. I don’t. I stopped using pro tools like that over a decade ago. I’ve used a lot of different prime broker platforms at JP Morgan, Jeffries and others. But I largely just stick to thinkorswim for now. Trading leaps, spreads and charting, it’s all you really need. I have’t even looked at Bloomberg pricing recently. It was well over $2k a month a decade ago.
Hi Sam,
Back at the bottom of the first leg (-14%) of the Feb 2025 correction the VIX reached 30. The current VIX is already 25-29 with the QQQ only down like 1.5% from ATH. Would love to hear your thoughts on whether this has any correlation with the magnitude of the upcoming correction as the increased VIX is suggesting higher premium of short dated put options. Does this have correlation with the size or just the fact market participants are expecting some short term downward movement in the general sense?
Thanks!
Also curious to hear Sam’s thoughts on this. Similarly, we hit “extreme fear” as of yesterday on the fear/greed index.
So sometimes you volatility spikes when people start buying a lot of protection. We’ve been in a relatively low vol environment for the last few months and when you have a huge sell-off like you had last Friday, it sort of sparks a lot of option activity.
And then you have all of the indecision coming into play with the market constantly reversing course. We had the QQQ trading at $590 at 4 am this morning. That’s pointing to a huge $10 gap-down. And instead we’re sitting here up $4.00 on the day. So that is of course impacting the higher $VIX.
I haven’t really looked at the correlation between high volatility early in a sell-off and the total correction size at all.
But it did reach overbought and that is very concerning for the bear side of the trade. Because overbought $VIX tends to lead to big rebounds like we’re seeing today.
But that’s also because we’ll have typically seen the market down heavily and the rebound is intended to both act as a relief value and wipe out the huge increases in option values.
Here, the market has barely pulled back. So hard to say what to infer from this whole set-up.
Normally, you wouldn’t get the $VIX trading overbought until the market is down at least 7-8% from its highs and even that would be early.
Can we deduce from these abnormal market behaviors that the worst is to be feared on the precipitous decline to the major gap zone or that a bullish rebound ultimately until mid-term is ultimately not improbable?
There
Shorting the market is a fools errand
crazy tomes
Keeps going and going. It’s unrelenting. ????
Is that bear capitulation? If so, means we must be close. I also sold half of my 10/31’s and rolled them into 11/21’s. I figure at this point I might as well keep the remaining 10/31’s, and I want the remainder in 11/21’s so this pain and ???????? wasn’t for nothing when it finally does roll over.
Hey Sam, what’s your take on what’ll happen next week? I know it’s probably a tough environment to guess but I’m curious..
I expect the QQQ to test $608 very early in teh week and then roll over again back under $600. We’ve seen this pattern before. It’s going to test the highs of the range.
But we’re now getting into the very very late stages of this whole thing now. 135-days and counting. Technically if new highs aren’t made, then it’s 130-days. But even then, that’s an extreme amount of time for the market not to sustain a correction. Especially when there’s huge built-in profits — 52% on the QQQ. That’s a lot of unretraced profits.
Thank you!
Sam – This is very unusual time for sure. With president’s tweet, things are changing every day. Is it him or underlying hedges people have that is causing this tight range? If investors have lot of puts or hedges along with owning stocks, how will MM’s allow drastic drop? They will continue to collect premiums on both ends. Is this correct assumption? I also hear govt folks talking about not letting market fall etc, is it really possible for them to control this? Finally with big tech earnings coming up next week, and beyond along with potential interest cuts….do you think correction is still a possibilty? Sorry if these are naive questions.
Genuine question: if corrections are driven by sentiment and policymakers, why would they ever let the market enter a correction? Do we believe some administrations don’t care about the market and/or want the market to sink? What event or policy caused the significant corrections in July 2024 or September 2022? If we can’t remember off the top of our head (like tariff, financial crisis, or dotcom) was the event really significant enough to cause 16% drops?
Think about this logically: if you had control over the market, would you want it to grind up slowly like it has the past 2 to 3 months, or would you want it have big up down cycles where you know exactly where the top bottom next top and next bottom will be (since you control it)? You make way more money in with big drops and then insane rallies vs. the market grinding up like 2% per month like we’ve seen since August.
I’m not pretending like I know how things will play out one way or another but offering a counter argument.
Sam,
Thanks for the daily briefings. Do you still think we’re due for a correction? Interest rates will likely be lowered again, the trade war may wind down again, and earnings season is right around the corner.
Looking back at my comments from 10/02/2025, I still believe we’re long overdue for a correction—at least within this year. Nothing seems capable of triggering it until the administration decides to pop the bubble. Practically every market around the world is rising. I know I shouldn’t be relying on community sentiment, but I’m seeing more than 90% of posts expecting a correction.
Sure, there will be sell-offs like last Friday, but those dips tend to get bought up the next day anyway. I am getting the sentiment of the topping and consolidation volatility may continue for months, with melt-ups lasting into next year’s midterm elections. At this point, I’m just putting this out there—hoping I’m wrong.
VIX dropped; futures surging
It’s closing in on ATH
QQQ nhod $609.95
QQQ nhod $610.07
I agree, gap up and run, the market wants new ath
VIX below key level 20
QQQ nhod $609.59 QQQ ~50bps off ATH
Right now the QQQ just hit $610.02. I don’t see how with earnings, interest rate cuts, Trump stopping some tarrifs and money pouring in on every dip that we don’t blow by $613. It seems like it’s going to keep going up for a while. Nothing seems to stop it
it feels like calm before the storm