SECT CAPITAL — SIGNAL IN THE NOISE

Weekly kNN + Catalyst Map

10–14 Nov 2025 · Equal-weight basket · Buy once on Monday · Research only (DYOR)
TL;DR: We run a 10-name, equal-weight **catalyst basket** sized at **$1,000 per name**. Entry is the Monday open after a brief 3–5 minute settle. **Stops:** hard −8%. **Optional OCO:** +12% target. The edge we pursue: **event density + RVOL confirmation + clean neighbor drift** while capping correlation.
Execution window: 09:30–09:35 ET auction/VWAP blend.
Risk budget: Max week loss ≈ 10 × 8% × $1k = $800, ignoring correlation.
Correlation guard: ≤3 Tech, ≤2 Crypto-beta, diversify across Comm Svcs/Cons Disc/Tech/Financials.
Why weekly: Focus on **5D drift** around catalysts; **time stop = Friday close**.

The basket (10× $1,000)

TickerCompanyWhy nowCatalyst windowGuards
PLTR Palantir Technologies High attention flow; recent product/go-to-market cadence supports 3–5D drift when RVOL ≥ 2×. Customer/contract headlines & gov’t awards cadence. Do not chase > +1.5× ATR gap; hard −8% stop.
AMD Advanced Micro Devices Follow-through potential on data-center narrative; neighbor set positive when IV term-structure is flat. Semis newsflow; peer read-throughs. Half-size if IV front/2nd week > 1.25 and rising.
QCOM Qualcomm Improved handset mix + RF; residual momentum stable, lower crowding than megacaps. OEM launches / supply chain updates. Skip if open gap > +2× 20D ATR; −8% stop.
UBER Uber Technologies Take-rate/margin debate creates dispersion; neighbors show post-event grind when RVOL confirms. Regulatory & mobility data points. Ex-post shock rule: if first 15m VWAP < open, cut to half.
SHOP Shopify Seasonal e-com attention; options flow tends to amplify early-week moves. GMV datapoints / partner updates. Skip chase > +1.5× ATR; −8% stop.
HOOD Robinhood Markets Retail activity beta; RVOL spikes around product/crypto changes. Crypto/tax-lot features; rate headlines. Size awareness (higher vol): abide −8% stop strictly.
ABNB Airbnb Booking curve & inventory updates; neighbor drift often clean post-print. Travel demand catalysts; regulatory chatter. Half-size if macro tape weak (rates ↑, travel beta hit).
DBX Dropbox Under-owned, cash-flow story; tends to trend on RVOL-confirmed headlines. Capital return / AI features cadence. −8% stop; no chase if > +1.2× ATR at open.
SPOT Spotify Pricing & margin narrative; attention-led RVOL supports early-week drift. MAU/pricing updates; content deals. Trail to −1× ATR once +2× ATR in profit.
COIN Coinbase Crypto beta with structural liquidity tailwinds; strong RVOL sensitivity. ETF/flow headlines; chain activity. Position as volatility sleeve; obey −8% hard stop.

Execution blueprint

Why these, not others (CFA/PM rationale)

The portfolio construction objective is a **weekly target return of +10% at the basket level** through dispersion capture, not factor timing. We maximize the chance of a large single-name outlier while capping left-tail risk via hard stops and cross-exposure limits. Each selected name historically exhibits higher **event-proximal elasticity**—measured as the slope of 3–5 day returns vs. a one-sigma surprise proxy in attention (headline count × source-quality weight) and options volume (p/c-adjusted). We exclude crowded mega-caps where implied-to-realized volatility spreads are elevated and where our neighbor sets (k-nearest sequences by state: 5/10/20D returns, EWMA vol, kurtosis, proximity to prior catalyst) show poor drift quality or high reversal probability.

Alternatives screened out this week failed one of: (i) RVOL leadership (≥2× daily or ≥1.3× in the first hour) with clean tape, (ii) acceptable front/second-week IV slope (≤1.25 and stable), or (iii) portfolio correlation constraints (we cap Tech at three, crypto-beta at two). The resulting basket mixes **growth attention** (PLTR, SPOT), **quality Tech with catalysts** (AMD, QCOM, SHOP), **consumer & travel dispersion** (ABNB, UBER), **platform/fintech beta** (HOOD, COIN), and one **cash-flow/value tilt** (DBX). The **expected hit rate** need not exceed 40–50% when the right tail is protected by the +12% OCO and the left tail is fixed at −8%.

Positioning: 10 × $1,000 = $10,000 gross. Basket beta ~low-to-moderate with crypto sleeve volatility. Expect **RVOL-led moves Monday–Wednesday**, fade risk into Friday unless tape is broad-risk-on and multiple seats have locked +10–12%.
Do Your Own Research. This note is for research and educational purposes only and does not constitute investment advice. Confirm all event dates/times and reassess risk if macro conditions change materially.