07 Dec 2025 3 min read

Sunday Prep: Leaning Into AI, Respecting the Tripwires

Session: 2025-12-07 AM (Sunday prep)

1. Context: Markets Closed, Risk Very Much Open

It’s Sunday, which means no executions and no intraday noise. The point of this session is simple: confirm the macro backdrop, sanity-check the portfolio stance, and make sure the risk rules are sharp enough that Monday’s emotions don’t get a vote.

2. Portfolio Stance: AI Engine, Value Shock Absorbers

The equity book is deliberately aggressive and tilted toward AI and growth. Roughly four-fifths of the equity exposure runs through QQQ, AAPL, MU, and NVDA – a concentrated bet on the ongoing AI and semiconductor upcycle and the broader large-cap growth complex.

That high-octane core is balanced with smaller sleeves in WMT, XLV, XOM, and CCJ, plus a modest UVXY volatility hedge. The goal isn’t perfect diversification – the mandate is to stay fully invested and lean into momentum – but to make sure the portfolio isn’t a single-theme hostage if AI and high beta wobble.

3. Macro Regime: Friendly, But Crowded

The working macro thesis remains:

Fed-cut / soft-inflation regime: Markets are still pricing a path of easing rather than fresh hikes, with inflation data drifting in the “comfortable enough” zone.
Risk-on, AI-led tape: Indices sit near highs, with leadership still concentrated in AI, semis, and mega-cap growth.
No obvious funding or credit stress: Spreads and funding markets aren’t flashing red right now.
Key risk: positioning and calendar: The real danger is crowded positioning in AI and crypto plus the December macro/Fed event cluster. If anything cracks, it will likely show up first in those over-owned segments.

In other words, the wind is still at the back of a growth-heavy book, but this is late-innings behavior, not the first inning of a new bull market.

4. Risk Management: Raise-Only Floors and Clear Tripwires

Risk control for this book is deliberately manual and asymmetric:

Raise-only floors: Each core position has a floor that can move up as price trends higher, but never gets moved down to “give it more room.” The job of the floor is to mark the level where the market has proven the thesis wrong enough to rotate, not to guarantee a painless exit.
UVXY band: The UVXY hedge is kept within a predefined size band – big enough to matter in a shock, small enough not to be a persistent drag in normal conditions.
Primary tripwires: Floors on NVDA and QQQ are the key system-level alarms. If they trigger on a closing basis, that’s a signal that the AI/growth regime may be shifting, not just a random dip.
Health care catch-up: The XLV floor still needs to be formalized; that’s a to-do for this week so that defensive exposure is governed by the same rule set as the rest of the book.

5. Process Rules: Fully Invested, Zero Excuses

The mandate is aggressive but rules-based, which means a few non-negotiables:

Stops are evaluated on closes, not intraday noise. No bailing on a 10 a.m. flush if price recovers by the bell. Either the daily bar confirms the break, or it doesn’t.
Staying fully invested is part of the edge. The job isn’t to time cash; it’s to stay deployed in the strongest themes and rotate when the tape says so.
Stopped-out capital is rotation fuel, not a vacation. If a floor breaks, that capital is earmarked for areas of non-AI strength, not parked on the sidelines as an excuse to loosen discipline.
Rules first, narratives second. The macro story is useful context, but the actual decisions come from price, floors, and closing-level signals.

6. What Monday Needs From This Plan

Heading into the week, the playbook is straightforward:

Respect the existing floors on NVDA and QQQ as hard tripwires.
Finish specifying and documenting the XLV floor.
Treat any downside follow-through in AI/growth as information, not betrayal.
If stops trigger, immediately scan for relative strength in non-AI sectors to redeploy, instead of “waiting for clarity.”

Positioning is intentionally bold. The discipline has to be bolder.

Sources & evidence: This post is based on the author’s internal trading journal and public macro data from major economic releases and central bank communications as of 2025-12-07. For macro context, see recent Fed statements and inflation reports on federalreserve.gov and inflation data on bls.gov/cpi.