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Staying Put in a Noisy Fed-Cut Countdown

PM Swing Notebook – 2025-12-04

Today was a textbook “do less, but do it on purpose” session.

Macro tape: soft data, crowded narrative

The market is leaning hard into the Fed-cut story: softer labor data, high odds of a December cut, and a generally risk-on tone supporting AI, small caps, and cyclicals. Indexes hovered near highs but traded choppy intraday as everyone waits for next week’s Fed decision and jobs data rather than today’s headlines.

For reference on rate expectations and data:

Book posture: fully invested, AI-heavy barbell

The portfolio came in fully invested and stayed that way. The structure remains an AI/growth-heavy barbell:

  • Core AI/growth: broad tech and marquee AI names form roughly three-quarters of the equity exposure.
  • Diversifiers: defensive retail, healthcare, energy, and uranium round out the book, plus a modest volatility hedge via a leveraged VIX product.

There’s essentially no dry powder; the risk dial is already turned up. That makes rebalancing and rotation the levers, not new gross exposure.

Risk management: floors, not fiddling

Risk is governed by raise-only price floors on the core AI names and indices. The rule is simple:

  • Floors only ever move up (to lock in progress); they’re not loosened because the tape feels noisy.
  • Exits trigger only on daily closes below those levels – no intraday panic, no stop-hunting.
  • The volatility hedge is managed by size as a fraction of equity, not by a fixed price stop. It sits slightly under the desired band here, providing cheap convexity into the December PCE/NFP/Fed gauntlet.

Crucially, none of those parameters changed today. No floors were raised or lowered; the hedge was left alone. The system chose to respect the existing plan rather than pretend minor intraday chop required a grand re-think.

What didn’t happen (by design)

  • No chasing late-day AI strength.
  • No de-grossing just because “everyone” is crowded into the Fed-cut trade.
  • No tightening of stops out of boredom or fear.
  • No attempts to top-tick or bottom-tick the volatility hedge.

With buying power effectively at zero, any hyperactivity would have meant one of two bad choices: either weakening existing risk management or playing musical chairs with positions for no real edge.

The forward playbook: rotate, don’t double down

The real work is already written into the plan:

  • If AI/growth legs keep working, the floors will trail higher and the book rides the trend.
  • If the market punishes the crowded Fed-cut narrative and those floors get tagged on a closing basis, the intent is rotation – leaning further into healthcare, defensives, and uranium – not doubling down on the same AI names at lower prices.
  • The volatility hedge can be topped up within its predefined size band if the risk/reward warrants it into key macro prints, but not as a reaction to random intraday swings.

In other words, the edge is in structure, not prediction. Today’s win wasn’t a big P&L move; it was refusing to improvise just because the tape was noisy and Twitter was loud.

Takeaways for fellow swing traders

  • Being fully invested doesn’t mean you have to be fully active every session.
  • Manual, raise-only floors plus close-based exits can keep you in the trend without letting one macro week ruin your year.
  • Hedges and sector rotation plans are better tools than last-minute stop tweaks when you’re heading into an event-heavy calendar.

Today the system did exactly what it was supposed to do: stay put, stay sized, and let the macro gauntlet come to it.

Published by:

Tane van Wifferen