Hello reader, welcome to the latest issue of HX Weekly!

Each week we bring you a new edition of HX Weekly that includes three distinct sections.

In the first section, Thoughts on the Market, we'll offer insights into current economic and market news.

In the second section, HX Daily Redux, we'll revisit investing concepts, tactics, and more from past issues of HX Daily.

And in the third section, Market Wizard’s Wisdom, we’ll share thoughts, quotes, and theories from the greatest investing minds of all time.

Now, let's dive in!

Thoughts on the Market

Trading in the Time of Trump 2.0: The Market That Refuses to Fall

If you’ve been doing this long enough, you develop a feel for when markets are changing character.

Not based on headlines. Not based on narratives. But based on how they react under pressure.

And right now, we’ve just lived through two nearly identical stress tests.

The first came last April, during what many dubbed “Tariff Liberation Day.”

A sudden wave of policy-driven fear hit the market, stocks rolled over hard, and for a moment, it looked like the bull run might be in serious trouble.

The second just happened.

This time, it wasn’t tariffs. It was war.

The escalation involving Iran, the threat to the Strait of Hormuz, and the constant drumbeat of geopolitical uncertainty triggered another broad-based selloff.

Once again, the market had every excuse to fall apart.

And once again, it didn’t.

Instead, what we got was something far more important.

A test, and a confirmation.

A Familiar Pattern… With a Different Trigger

What’s striking isn’t just that the market recovered.

It’s how closely this recovery mirrors what we saw back in April.

In both cases, you had a sharp, emotionally driven pullback fueled by uncertainty. In both cases, investors were forced to reassess risk in real time. And in both cases, the market found its footing faster than anyone expected.

But here’s where it gets interesting.

If you rewind the clock to late 2025 and early 2026, the market was already under pressure, particularly in tech.

The so-called “AI scare,” fueled by viral commentary and high-profile product announcements, had triggered a steady rotation out of the mega-cap names that had led the market for years.

On the surface, it looked like weakness.

Underneath, it was something else entirely.

Breadth was improving. Capital was rotating. Investors weren’t leaving the market; they were redistributing within it.

Then came the Iran conflict.

And for a moment, it suppressed everything.

The rotation stalled. The broader market sold off. Fear took over.

But now that we’ve moved into a ceasefire phase, with negotiations underway and tensions cooling, the market has snapped back with force.

Not only have we recovered, but major indexes have pushed to fresh all-time highs.

That’s not fragile behavior.

That’s strength.

The Data Is Starting to Scream

Individually, the stats making the rounds this week might seem like curiosities.

A quirky streak here. A rare signal there.

But taken together, they’re telling a much bigger story.

The NASDAQ just posted one of its longest winning streaks in decades.

Historically, these kinds of runs don’t happen in weak markets. They happen when capital is aggressively moving into risk assets, often at the early stages of sustained advances.

Zoom out further, and you see the same pattern.

Large, rapid upside moves over short timeframes, what technicians call “momentum thrusts,” have been rare since 1950.

But when they do occur, forward returns have been overwhelmingly positive.

Then there’s the volatility side of the equation.

The VIX has collapsed at a pace that historically coincides with strong forward equity performance.

That’s not just about fear fading; it’s about positioning shifting.

As volatility declines, systematic strategies increase exposure, liquidity improves, and the market becomes more prone to trending.

And perhaps most telling of all is what happened beneath the surface.

The S&P 500 went from down more than 5% on the year to positive before mid-April.

That kind of reversal has only happened a handful of times in history. Every single one of those instances ended the year higher.

That’s not noise.

That’s a pattern.

The Bull Market Was Tested, And It Passed

This is the part that matters most.

Markets don’t prove their strength when everything is calm. They prove it when something breaks.

We’ve now had two major “break” attempts in the span of a year.

First tariffs. Then war.

Both times, the market bent.

Neither time did it break.

That tells you something important about the underlying trend.

Despite all the noise, despite the rotation out of mega-cap tech, despite the geopolitical shocks, the bull market structure remains intact. In fact, you could argue it’s healthier now than it was six months ago.

Because it’s broader.

The so-called “Magnificent 7” have taken a back seat for now, while capital has flowed into other areas of the market. That kind of participation is exactly what you want to see in a durable bull run.

And here’s the kicker.

If and when those mega-cap names reaccelerate, you’re not just talking about continuation.

You’re talking about potential acceleration to the upside.

Why This Time Feels Different

There’s another layer to all of this, one that’s harder to quantify, but just as important.

The market’s reaction function has changed.

Think about it.

If you took everything that’s happened this year—the war, the geopolitical risks, the policy uncertainty, and dropped it into last year’s environment, there’s a good chance the market would have been down 20% or more.

That's what happened around Tariff Liberation Day.

But this time?

The drawdown was shallower. The recovery was faster. And the follow-through has been stronger.

Why?

Part of it may be desensitization.

Investors have spent years navigating a constant stream of headline-driven volatility, much of it amplified by social media and an unconventional style of leadership.

Part of it may be experience.

After getting burned selling into last April’s weakness, many investors have learned the same lesson: dips don’t last.

And part of it is positioning.

When enough investors are underexposed, it doesn’t take much to force them back in.

Whatever the reason, the result is the same.

The market is becoming more resilient.

So Where Do We Go From Here?

None of this means the market will go straight up from here.

In fact, the data would suggest the opposite in the short term.

After extended winning streaks and rapid upside moves, it’s perfectly normal to see some consolidation. Even within strong historical setups, pullbacks of 5–10% are common along the way.

That’s the cost of participation.

But zoom out, and the message is hard to ignore.

We’ve just witnessed a rare combination of signals—momentum thrusts, volatility collapses, breadth expansion, and rapid recoveries from drawdowns—that have historically aligned with strong forward returns.

Not occasionally.

Consistently.

The Bottom Line

If you look at any one of these charts in isolation, it’s easy to dismiss it as an interesting stat. But when you step back and connect the dots, a clearer picture emerges.

The market was tested. Twice.

And both times, it responded the same way: by recovering, broadening, and pushing higher.

That’s not what the end of a bull market looks like.

That’s what the middle of one looks like.

And if history is any guide, we may be seeing the early stages of something much bigger.

It has been absolutely fascinating that the stock market has been hit by Trump induced volatility in 2026 at almost the EXACT SAME TIME as it was also hit last year.

The catalyst (Iran vs. Tariffs) has changed and this time was a bit less volatile, but the markets are almost carbon copies of each other. We thought it would be useful to share our thoughts from about this time last year as many of those apply today.

Here you go....

HX Daily Redux

It’s Time to Get Tactical

If you’ve been following the S&P lately, it’s been a roller coaster ride.

One day it’s up 2%, the next it’s down 2%. And who knows what will happen tomorrow.

For traders, this can be extremely frustrating and it’s nearly impossible to find a trend to trade against.

There is a ton of NOISE in the market right now!

• The rulers of countries are battling it out on social media over tariffs

• Trump is threatening to fire Fed Chairman Powell one day, then saying he’s got a job the next

• Cramer is on CNBC in the morning claiming that maybe the bottom is in and later that evening saying maybe it’s not

All of this noise is driving a tremendous amount of market volatility.

Just look at this 3 month S&P 500 Chart:

After hitting a record level of 6,152.87 on February 19, 2025, the S&P 500 declined almost 20%. Then on April 9th, the index saw its biggest one-day gain in years!

Specifically, the S&P 500 jumped 9.52%, closing at 5,456.90. This rally followed a period of market uncertainty, including the rise in bond yields and potential tariff increases.

Then there were major declines again. And just this week, the index is attempting a multiple day to rally on no major news.

As traders, who are we supposed to listen to and what are we supposed to do?

Well, during periods of volatility like these its valuable to return to technical analysis to cut through the noise and get a sense of what’s actually happening.

So, let’s take a look at a longer term S&P 500 chart from LPL Research:

What does this chart show us? Well, there a few key learnings here.

First – the long-term trend is intact.

One of the key insights from the S&P 500 chart is that, despite a 16% drop, the index's long-term upward trajectory is still intact. This is demonstrated by the S&P 500 rebounding from a rising trendline that connects the lows of March 2020 and October 2022. This indicates that the market’s most probable direction remains upward—though short-term volatility and risks still persist.

Second – a capitulation event probably occurred.

The heavy wave of selling in the stock market earlier this month likely signaled a capitulation point, hinting that the index’s drop to approximately 4,835 may represent the bottom of the current downturn. Supporting this view is the fact that this low aligned with two key support zones: a horizontal support level tied to the S&P 500’s January 2022 high, and an upward-sloping trendline dating back to March 2020.

As Enrique Abeyta recently pointed out on April 3rd in a Truth & Trends post, When Panic Turns to Profits – “Every panic feels different, but they all act the same. Whether it was COVID, the financial crisis, or the dot-com crash, we’ve seen this movie before. And we know exactly what to watch for.”

Enrique’s post details four key signals that investors should watch for to come out on top of this volatility. Read the full article here.

Third – the volatility probably isn’t over

Although the stock market may have already gone through a capitulation phase, that doesn’t necessarily signal the end of volatility—or rule out the possibility of additional declines. In fact, LPL pointed out that weak stock participation and the absence of leadership from cyclical sectors indicate a heightened risk that the S&P 500 could revisit its recent low near 4,835.

According to LPL, holding that key support level is critical for the index’s broader uptrend to remain intact. On Tuesday, the S&P 500 climbed roughly 1.5% to close at 5,234.

So, what should we do now?

First and foremost. Don’t panic, and don’t try to time the bottom.

As we’ve written about frequently this month, if you are trading, apply the 3.5% rule. Use pullbacks as opportunities to buy something. Conversely, use rallies to sell something to trim your portfolio down to winners and raise some cash for future trades.

Last, but not least, when you’re feeling down look at the long-term chart and remember the trend is intact. remember to look at the long-term trend.

In times of market volatility, its easy to focus on short-term events and easy to to forget that stocks are basically just trading at levels thy were a year ago.

When you look at it like that, things don’t seem so bad do they?

Market Wizard’s Wisdom

Passing of an Emerging Markets Legend

Yesterday marked the passing of emerging markets investing legend Mark Mobius at the age of 89.

Many of us first learned about Mobius through his regular appearances on the Barron’s roundtables, where he championed the promise of emerging markets investing.

Mobius was born in 1936 in Hempstead, New York, to German and Puerto Rican parents. He attended Boston University and then MIT before he moved to Asia to launch his investing career.

He gained wider recognition in 1987 when Franklin Templeton founder John Templeton asked him to lead the Templeton Emerging Markets Group. Templeton had long been one of the premiere investors in emerging markets and they grew to be one of the largest with more than $50 billion under management.

Mobius was likely the most well known emerging markets investor and introduced many retail investors to investing in them.

Rest in peace Mark Mobius. Here are some great quotes of his from over the years.

Have a good weekend.

Mobius’s career was defined by finding opportunities that were not commonly known by other investors. He spent thousands of hours exploring unknown companies in far-flung markets.

This approach not only enabled him to find great opportunities but was also quite interesting to him.

I share that same passion for international investing. I have always enjoyed researching these companies that few Wall Street investors know about.

Pairing great opportunities with topics that genuinely interest you creates a winning combination.

Emerging markets are MUCH more volatile than the US stock market.

While we have seen a major market crash maybe once every 15 years and an economic depression maybe once every 100 years, emerging markets might see them every decade.

His quote here paraphrases the famous quote from English politician Baron Rothschild who said, “The time to buy is when there's blood in the streets, even if the blood is your own.”

It may sound counterintuitive, but investors often earn the best returns in emerging markets precisely when conditions look ready to collapse.

This quote is similar but can be applied to individual companies.

One great investing tactic Mobius employed was to find high quality companies that were in distress as a result of the economic volatility in their home market.

When the economy eventually recovered (they always do!), the company would come storming back.

Buying the “national champions” in distressed markets is a strong strategy. The best time to do it, though, is when it appears that everything is falling apart.

Emerging market investing involves a lot of volatility. To be successful, it also requires a lot of patience.

While markets always recover, that recovery in emerging markets can often take as long as a decade.

The willingness to hold on to those positions over a long-time frame promises high returns but requires great discipline.

Mobius had a famous contrarian streak.

He saw that in emerging markets, the way to big returns was to run towards the volatility and not away from it.

This type of investing is not for everyone but if you can master the discipline to do it, great returns lie ahead.

We hope that you’ve enjoyed this week’s issue of HX Weekly…

Do you have any thoughts, questions, or feedback? Tell us more in the comment section or at [email protected].