Sunday Prep: Positioning a News-Driven Swing Book Ahead of NVDA
Sunday Prep: Positioning a News-Driven Swing Book Ahead of NVDA
How a speculative, news-driven swing book is set up for Monday
With US cash markets closed today, this is a prep run for Monday rather than a live-fire session. The goal: make sure the book is aligned with the current macro backdrop, the risk framework is intact, and there’s a clear playbook heading into a binary AI catalyst in NVDA later this week.
Current portfolio tilt
The book is currently heavily skewed toward AI and mega-cap growth via AAPL, NVDA, and QQQ, with smaller sleeves in:
- Financials via XLF
- Industrials via GE
- Energy via XOM
- A capped-size volatility hedge via UVXY
Think of this as: core risk in AI/mega-cap tech, plus small diversifiers and a volatility overlay rather than a classic 60/40 portfolio.
Risk framework: fully invested, floors and a hedge
The working assumption is to stay fully invested and let news and price action drive rotation, not cash levels. Risk is controlled through:
- Manual, raise-only stops: Floors are set on key positions and only ratcheted higher as trades work. They are not relaxed after entry.
- Systemic hedge via UVXY: UVXY is capped at a small, pre-defined slice of the book. It’s there to cushion a volatility spike, not to turn the portfolio into a bearish bet.
- Asymmetric risk focus: The playbook is to cut via floors when the thesis breaks or price invalidates, while letting winners run as long as the news and tape confirm.
Macro backdrop in one page
The macro lens going into Monday:
- Fed December cut odds: Market-implied probabilities (see CME FedWatch Tool at CME Group) are treating a December cut as roughly a coin toss.
- Higher-for-longer bias: Even with cut odds in play, the dominant narrative is that policy rates stay restrictive for longer than the last cycle, which keeps a lid on how far duration-sensitive, long-duration growth names can stretch without earnings follow-through.
- Recent volatility in tech/AI and small caps: Mega-cap tech and AI have seen sharp swings around earnings, guidance, and positioning. Small caps remain more sensitive to growth and financing conditions and have generally been choppier than the large-cap indices.
- Energy and defensives as relative winners: Over recent weeks, energy and classic defensive sectors (staples, healthcare, utilities) have acted as relative ballast versus high-beta growth. You can track this via common ETFs like XLE (energy) and XLP (staples).
All of this feeds into one core idea: the tape is still willing to pay for growth and AI, but only if the data and earnings justify it. Hype alone is getting discounted faster.
Monday 10:00 ET playbook
The plan for Monday’s first half hour to hour of cash trading is procedural and boring by design:
- Re-sync positions: Confirm fills, sizes, and current marks across all names. No new decisions until the book is accurately marked.
- Check for closes below floors: Any position that violated its downside floor on Friday’s close or the Monday open goes to the front of the triage list. The default is to respect the floor unless fresh news genuinely upgrades the thesis.
- Upgrade stops toward ATR-based levels: Where trades have moved in the right direction, the next step is to push stops closer to objective levels (e.g., recent swing lows plus an ATR buffer) rather than emotional levels (“this feels like enough profit”).
- Only then consider tactical tweaks: After risk is clean, small tactical adjustments are on the table depending on whether the tape is opening risk-on (breadth strong, growth leading) or risk-off (defensives and volatility leading). That might mean nudging AI exposure up or down at the margin or adjusting the size of the UVXY hedge within its predefined cap.
Takeaways for trading into a binary AI event
Running a speculative, news-driven book into a binary AI catalyst like NVDA earnings comes down to a few simple principles:
- Size the story, not the headline: NVDA earnings are a marquee event, but position size still has to reflect your overall portfolio risk, not just your conviction in the narrative.
- Define your exit before the gap: Decide in advance what you’ll do on big gaps up or down (take some off, tighten stops, or stand aside) instead of improvising in the moment.
- Let the tape confirm the thesis: Post-earnings, price, volume, and follow-through across the AI complex (NVDA, AAPL, QQQ and peers) matter as much as the headline numbers. Let the market tell you whether the risk-taking window is opening or closing.
Markets are closed today, which makes it the perfect time to do the unglamorous prep work. Tomorrow is for execution; today is for making sure the playbook is tight.
Sources and references: