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Two-stage process: A quantitative screener filters ~1,000 stocks down to the strongest candidates, then Claude AI selects the final 3–5 picks each morning based on technical setup, macro context, and risk.
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Multiple styles: Picks span growth, value, dividend, blue chip, and speculative categories to maintain diversified style exposure across the portfolio.
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Momentum required: Every pick must be trading above its 20-day and 50-day moving averages, outperforming SPY over the last 10 trading days, and showing above-average volume (1.5× the 30-day average).
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Earnings blackout: No picks are placed within 5 calendar days of a company’s earnings announcement — in either direction — to avoid binary event risk.
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Minimum 2.5× reward-to-risk: Every pick must offer at least 2.5 times the reward relative to the stop-loss risk before it is considered for entry.
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Dynamic position sizing: Size is calculated from ATR-14 (Average True Range) and automatically scaled for the current VIX regime — smaller positions in elevated or crisis conditions, full size in normal markets.
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Dynamic sector concentration: Hot sectors (outperforming SPY by 3%+ over 10 days) can contribute up to 4 picks; weak underperforming sectors are capped at 1 pick to limit concentration risk.
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Universe: S&P 500 + Russell 1000 — approximately 1,000 unique stocks scanned each morning after market open (duplicates removed between indexes).
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Stage 1 screener: Hard filters remove illiquid and high-risk names — minimum price ($5), market cap ($2B+), average daily volume (1M+ shares), 52-week performance (not down more than 20%), and beta (under 4.0).
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Stage 2 screener: Full technical, fundamental, and sentiment scoring — SMA trend filter, relative strength vs SPY, volume confirmation, RSI, ATR, and earnings blackout check. Only the highest composite-score candidates advance to Claude.
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AI-assisted final selection: Stage 2 survivors are passed to Claude AI, which analyzes each candidate in the context of current market conditions, sector momentum, and portfolio composition to select the final picks.
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Risk management: VIX-based regime detection (normal / elevated / crisis) automatically adjusts per-trade position size and stop-loss width to keep portfolio risk consistent across volatility environments.
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Stop losses: Set at 2.0× ATR from entry in normal conditions, widening to 2.5× in elevated regime and 3.0× in crisis to avoid being stopped out by routine noise.
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Weekly review: Every Friday the system re-evaluates all open positions — trailing stops up on winners, recalculating price targets, and closing positions where the original thesis has broken down.
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GFV protection: Settlement dates are tracked for all recently closed trades. Stop-loss exits that would trigger a Good Faith Violation in a cash account are blocked until sale proceeds have settled (T+1).