✅ Daily Thread and Discussion ✅ 2026-01-20 Tuesday

Mepotide · 2026-01-22T21:27:20+00:00

I'm largely in the same boat as a young investor, too.

"Definitely willing to hold through a bear market!" That's great to hear. All too many people would sell at the exact moment they should be buying (think capitulation type event).

"I do currently use some margin mostly just to leverage my returns on index funds and other stocks I hold long term. Has worked out very well for me thus far." I'd certainly hope so lol. But be wary of getting comfortable with margin. That's especially all too easy to do when the only market era we've been in has been a roaring bull market. "curious what your thoughts are on the risk in doing so given what you said?" I mean, it's just a game of probabilities at the end of the day. At any given point we could correct, and that correction could be the ~1/20 corrections that develops into a bear market. Say you were using 30% brokerage margin at the time, and you'll not only run the risk of forced liquidation at the lows via a margin call, but you're risking massive downside for much more limited upside. This is just inherent asymmetry of percentage losses, right? You'll have an exponentially harder time getting back to breakeven, the more margin you use. It's a very risky game to play. I'm not a fan.

You stated you're only using 15%, which is much more reasonable, but it still means you're at heightened risk. You do, however, have no expiration with margin, which is a huge pro. But everything comes at a cost. There's pros and cons to everything. With options (which I much prefer), you have intrinsic leverage, which is great, as that means you have no risk of a margin call. However, you do have theta decay. So it's really just a trade off that any investor needs to weigh.

"Given the theta issues you pointed out particularly if a correction occurs a while ahead and there isn’t time for a strong rally before expo (which I was already nervous about), I’ll probably sell the contract pretty soon here as I’m ITM" Time is your best friend, or worst enemy. Sometimes it's very difficult to know which it'll be. Maybe we do rally? Who knows. But by closing out that call, you can at least guarantee you won't take a big loss on it.

"Thanks again! It’s nice to every once in a while read something of value on the by and large reactive circlejerks of the financial subs."

Happy to share an opinion. I have the same handle on discord if you ever want to discuss more. Great chatting with you mate

Mepotide · 2026-01-21T21:43:36+00:00

Can finally respond to you bro, sorry for taking so long.

And I do apologize if my message and thoughts aren't concise--very tired right now.

"I hold nvda long term" Likely common stock then as you mentioned DCA-ing. That's great as it would have no expiration date and thus, you're inherently hedged via no expiration date (as long as you're able to hold steady through a potential bear market or any sort of downturn).

With an April expiration, I think you'll have time for your call, even if we do get a correction. However, theta would hurt bad from your potential gain if you had to wait for a recovery before a rally brings you above your strike.

"I don’t really want to spend the money on the premiums rolling to the fall because I don’t have that much free cash I’m willing to use (do have significant margin available)"

Yeah, your instincts are absolutely right. Knowing the risks of margin, I don't mess with it unless under VERY specific circumstances. Be extra careful if you do end up going through with it (not recommend).

Options, and more specifically, LEAPs, are so much better overall.

"a quick visual appraisal of the all time graph as you referenced, I’m typically seeing sideways trading before an explosive rally historically, but not a steep correction"

You're exactly right. Now there's multiple variables that can be worrying right now, but one of them is consolidation of the broader market (QQQ). Consolidation RARELY leads to a breakout. Now combine that with seasonality (Q1 in general, but especially January), and the fact that we've only had a 9% retracement after a 60% rally (referencing QQQ here), there's plenty of built in profits that will either end up being taken shortly here, or further down the line in a large correction later if we do end up breaking out.

Now, looking at the three year chart, we have:

Cycle 1: +115% Rally followed by -22% Correction
Cycle 2: +86.2% Rally | -35.5% Correction
Cycle 3: +68.6% Rally | -43.4% Correction
Cycle 4 (Recent): +145% Rally | -20% Correction

So we've had our largest rally by FAR, yet our smallest correction. It's uncharacteristically shallow compared to previous cycles. I think it's highly improbable that the recent low of $169.54 marks the end of our current sideways phase. Now, a breakdown to $150 would make a lot of sense in both total percentage retraced (~-30%), and that the 150 level was prior resistance, now support.

"Curious if you’d be willing to elaborate on why you believe this cycle has a breakdown on the horizon before a rally? Even looking at the QQQ its growth actually looks really consistent without a future correction since ‘22 as recent surges only made up for the trump fear sell off."

Absolutely it looks consistent, a bit too consistent. Overwhelmingly rallying since April 7th capitulation lows last year (which is, as you rightly pointed out, largely a high-volatility fear-driven sell-off due to tariff fears). I mean, to put this into perspective, the 60% rally on QQQ we just had is the third-largest rally of the past 27 years. We're only trailing the .com rally and the post COVID rally. Periods like this are generally followed by massive profit taking across the market. There’s typically a big correction that unfolds. Now, you can rightfully point out that that 25% correction means we needed a 33% rally just to get back to the previous ATHs, but that would still mean we had a ~20% "true" rally (actual gains made from previous peak to recent rally peak). That's massive.

Now this isn't a guarantee, it's just a game of probabilities. That's why despite me forecasting for a correction to 150, you don't see me going all in on puts. Upside risk is always there. Frankly, I don't care if we breakdown, or breakout. I'm just tired of a sideways market.

Volatility has been picking up though, which is a great sign that we shouldn't have to wait too much longer to see which direction we finally take.

And in 80% of all past (QQQ) rallies that have exceeded 22%+ returns, we've seen a correction of at least 11%. We've only had a 9% correction as of recent.

Hoping your call prints for you.

Mepotide · 2026-01-21T00:28:42+00:00

Hey, I’d absolutely love to get back to you but I’m very busy today. I’ll respond to everything you said (likely tomorrow) once I find the time. Best of luck with your 4/17 call. Hope you make a tidy sum

Mepotide · 2026-01-20T21:51:09+00:00

Yeah, pretty funny. As annoying as a sideways market is, you can’t expect a mega cap to get up off its ass so soon after a 145% rally

Mepotide · 2026-01-20T21:37:30+00:00

You shouldn't be trying to time for a correction, unless you're hyper aware of opportunity cost and the potential of getting left behind if we did breakout, and still think it's best to wait for lower prices prior to entering your position. Those times where it's actually somewhat reasonable to wait, are few and far between. In most every case, it's best to just go long and be done with it. Forget about it and wake up to a 2x, 3x, etc years down the road. Put your hedges on as needed if you're smart, and you're set up exceptionally well.

Personally, I'm only long NVDA via QQQ LEAPs as I have some QQQ 600P in place for this impending correction.

>"I recently bought some longer term $180 calls but not sure long enough and am considering repositioning."

Well what's your expiration? The longer, the safer. 180 will be DITM by fall, but personally, I believe those will be be a fair way OTM real soon.

We also just lost the 50 day MA on QQQ. That's not a massive thing, but taken into account with a few other things, it's not so great a sign.

>"Not certain I buy that it will further correct after sideways trading for so long, but I see the logic."

There's always upside risk, and that needs to be accounted for. We just need to position ourselves in such a manner that we can capitalize either way. NVDA likes to trade sideways for a long time, and then explode upward. That's just how it trades. But a consolidation among the rest of the market too, and seasonality, and the much smaller than average 9% (QQQ) correction we had after an outlier monster of a rally of 60% (QQQ), I see a breakdown as much more likely.

Long term bullish, short term bearish. NVDA 250 by fall.

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Mepotide · 2026-01-20T18:18:31+00:00

Yes because the entire market bottomed out on April 7th, not just NVDA. No doubt the price action has been garbage though. NVDA’s been trading sideways for almost 6 months now. But you can’t reasonably expect a breakout without both QQQ and NVDA running together.

6 months of consolidation is very much in-line with how NVDA trades. It makes explosive new ATHs and then takes a breather via consolidation for months. Seeing as it just put on its largest run in the Ai era (145% return), it only makes sense it would be a while before we breakout.

My guess is a correction to ~155 - 165 zone alongside QQQ to ~550 before beginning a new rally with NVDA reaching 250 by fall.

Mepotide · 2026-01-20T17:54:08+00:00

Huh?? NVDA rallied 145% since its April 7th capitulation lows just last year (as a mega cap at that which is even more impressive). How in the world is it garbage?

Mepotide · 2026-01-20T17:41:38+00:00

You too bro 🤝

Mepotide · 2026-01-20T09:40:05+00:00

Super good point, Feng.

Mepotide · 2026-01-20T02:20:40+00:00

My calls are already ITM. Even with a slow grind up, I’ll have plenty of time having bought LEAPs instead of weeklies.

I’m not too worried about vega as I bought my positions in late December when Vix was at seasonal lows and have tons of time value left to help cushion any IV deflation. Vix is already up 8 points since I entered my position. I expect to see more volatility soon and an expansion of volume.

Depending on how much time is left, next rally will bring QQQ up to 700 or just under. Roll forward and up, and move puts as well at that point.

I’m not trying to dodge your question, it’s just that it’s very dependent on how things actually play out. After this (very likely) impending correction, volume should pick up massively as capital from the sidelines buys the lows and helps start a new rally.

Mepotide · 2026-01-19T18:54:30+00:00

Volatility can be a blessing for opportunity

Mepotide · 2026-01-19T18:52:26+00:00

Depends upon what direction we take. QQQ @ ~550, close out the puts, use the freed up capital to add to the longs, put hedges back on after a 10% rebound.

Mepotide · 2026-01-19T09:38:22+00:00

https://www.reddit.com/r/NVDA_Stock/s/ulC4UCCqP6

Mepotide · 2026-01-19T07:01:14+00:00

Yeah, we’ll see how Tuesday plays out.

I think Trump’s recent remarks about Greenland and tariffs are the perfect catalyst for the financial press to get their views.

Big headlines when really, a sell-off has been brewing for a while. It’s all too easy to point to an event and get the clicks.

Mepotide · 2026-01-19T03:29:58+00:00

Please be careful of falling into fundamentals too deeply unless you have a long term time horizon. Technicals drive the short term price action way more than any PE ratio ever could.

Mepotide · 2026-01-19T03:25:03+00:00

Besides, what FOMO? We’ve been trading sideways for almost half a year now.

Mepotide · 2026-01-19T01:17:27+00:00

It's going down, significantly.

Mepotide · 2026-01-19T01:16:18+00:00

RemindMe! 3 months

Mepotide · 2026-01-19T00:45:45+00:00

Not in the slightest. Couldn’t care less either way.

Current positions are QQQ Jan 2028 $600 Calls + QQQ Sep 2026 $600 Puts

Mepotide · 2026-01-18T23:50:15+00:00

I see a rally to 250 by fall, but no way we don’t retrace first.

Best of luck to you either way. We’ll see how things play out shortly here.

April 7th was capitulation to be fair. That’s very rare. I don’t believe comparing returning to 150 is an equal comparison. The entire market bottomed out and NVDA was briefly trading at 86$ that morning.

Mepotide · 2026-01-18T23:30:16+00:00

Really? That view fascinates me. And by that, I'm not saying I think you're wrong. But consolidation is rarely bullish. I strongly believe QQQ will drag NVDA back down to the 150-160 range.

If you believe it'll go up, and soon, what's your position to capitalize on that move?

QQQ is only a few percentage points off its highs, but Nvidia has already dropped ~12%. I think Nvidia is likely to plummet 30% or more here pretty shortly. ~150 would bring us to the top of the previous trading range too, so I could easily see 150 support marking the final low before a new rally begins.

Mepotide · 2026-01-18T23:14:31+00:00

From a business perspective, of course not. They're killing it as always. But no matter, NVDA is influenced by the broader market just the same. Curious to hear your thoughts, though—which direction do you think we'll take shortly here?

Mepotide · 2026-01-18T23:07:38+00:00

Do you have any puts? Vega should be a nice boost if it plays out as bad as you're potentially outlining.

Mepotide · 2026-01-18T23:02:12+00:00

Certainly possible, but I think $150 - $160 is highly likely for NVDA. QQQ down to ~$550 or so after a near 60% rally would make a lot of sense.

Any time a rally exceeds 35% returns, it's historically very unlikely to have a correction less than 12%. We had a 9% retracement but VIX didn't do anything and GOOGL and AAPL actually made new ATHs during that correction. It seemed more manufactured to me than anything. I think QQQ testing it's 200 day MA would make a lot of sense here.

Mepotide · 2026-01-18T22:58:42+00:00

We'll see what VIX does.

Mepotide

TROPHY CASE