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 Markets

Fear is GOOD

There is an old Wall Street saying that says BULL markets ride a “Wall of Worry.”

The concept is that uncertainty is a necessity for stocks to move higher.

If everyone agrees that all is well, it is usually a sign of a top in the market.

Take a look at this chart of the NASDAQ Composite from late 1999 into the crash of the Internet Bubble…

We remember this period well and we can tell you – that while there was skepticism – the overall sentiment in late 1999 was one of ebullience.

The concept “this time is different” dominated and was supported by the stock price performance.

Contrast that period to where we are right now.

Here is a chart shared by my friend JC Parets of TrendLabs showing that for the second week in a row, there are more bears than bulls:

He also shared another chart for BofA Global Research showing that institutional investors have been big sellers recently. Here is that table…

This all makes a lot of sense as we have not only seen macroeconomic uncertainty around the Trump tariffs but also on the geo-political level with a potential attack on Iran.

This is before we even begin to deal with the dislocation in stock prices as concerns about the impact of AI has built up over the last six months.

Take a look at the absolute devastation in the iShares Expanded Tech-Software Sector ETF (IGV) over the last few months…

After being one of the long-term market leaders, this sector has been destroyed. It was having a very “normal” correction in late 2025, but this has quickly accelerated in 2026 as the group is down almost -25% year-to-date.

The damage in many individual stocks is a multiple of this decline. Many high-quality stocks are down as much as -35%, -50% or even -70%.

This is despite Q2 and full year 2025 earnings from the group objectively having been outstanding. While there was some “noise” in some of the reports, as there always is, as a group they reported very strong results.

These are also no longer expensive stocks. Leading companies like Salesforce (CRM), Workday (WDAY), and Atlassian (TEAM) all trade at less than 15% earnings with strong double-digit growth.

These AI concerns have also moved into other sectors including financials, logistics, information services, commercial real estate brokers, etc.

Every day, the market is anxiously awaiting a press release about the next AI engine in a new industry that will gap the stocks down double digits that day.

Just this week, we even saw market leader NVIDIA Corporation (NVDA) sell off -5% after reporting absolutely outstanding numbers.

The FEAR in the market is high.

Yes, despite the volatile environment, the overall stock indices are near their all-time highs.

The market capitalization weighted S&P 500 is less than -2% off of its all-time high.

More importantly, the equal weighted S&P 500 (RSP) is within 1% of its all-time high…

We also have most major stock indices all over the world at new highs.

This is while we have also seen interest rates move to the bottom end of their recent range.

While fear is extremely high in specific areas and the markets are treacherous for many stocks, in aggregate the market is extremely strong.

For many investors, this feels strange, unusual, or wrong.

We have news for you, though, this IS the normal.

The reality is that there are never moments of real certainty.

The vast majority of the time we are dealing with some uncertainty. Often quite a bit. Occasionally huge amounts.

Despite the persistent uncertainty, the stock market moves higher 70% of the time.

While many investors look at the uncertainty and fear as a weakness, we see it as an opportunity.

Combine it with the strength in the overall technicals and we think this is a great buying opportunity.

As Warren Buffett once said, “Be fearful when others are greedy and greedy when others are fearful.”

Right now is a great time to be GREEDY in our view.

With the U.S. Supreme Court finally ruling on the legality of President Trump's method of instituting tariffs a week ago today, we thought we would share our take on the ultimate impact of tariffs from this same time last year.

Our conclusion from last year, remains the same today.

There is a lot of "news" with tariffs for the media, but not a lot of ultimate impact for investors.

Tune out the media and focus on the fundamentals.

We hope you enjoy the note.

HX Daily Redux

A Trump “Trade War” Truth for You

The media has Trump’s “trade war” all wrong.

One of the most perplexing aspects of this new administration and the media’s response to it is how surprised they are when Trump does what he said he was going to do.

This past weekend saw a tremendous amount of news around the threat of tariffs on our largest trading partners — Canada, Mexico, and China.

I purposely worded that as “the threat of” because over and over, Trump has acted in a very predictable fashion.

He comes out firing with statements about massive changes he is going to make politically or economically.

Predictably, his political opponents, the media (aren’t they the same?) and members of his own party’s establishment quickly respond by predicting an oncoming apocalypse if he does what he just said he would do.

Every time, however, he then uses the “threat” of his big changes to exact some sort of value in exchange for toning them down.

I will not judge the real value of what he gains in this situation, because I’m not sure he even cares very much — he just gets SOMETHING.

Then everyone who protested is left scratching their heads when it turns out we don’t have a disaster after all… and may even be better off than before.

This was happening in his first administration. And now that he knows a lot more about politics and doesn’t need to worry about reelection, it’s happening in this administration times ten.

His actions this past week have me thinking about his method and its impact on the markets.

I keep asking myself one question…

The Question the Media Won’t Touch

What if Trump wins? Let me explain what I mean by “win.”

What if he repeatedly goes out with big, blustery threats of action and repeatedly puts our country in a better spot — both politically and economically?

The consensus strongly argues that this won’t work and that he will irreparably damage the existing world system. I don’t think that is a bad thing.

This brings us back to my earlier point about trade and tariffs.

There is an overwhelming consensus amongst the “smart” money that free trade is mutually beneficial. Disrupting it would cause an economic catastrophe.

I have a LOT of problems with this idea.

First, what is “free trade”?

If everything were allowed to move across borders with no tariffs, subsidies, or restrictions whatsoever, then that would be true free trade.

The reality, though, is much different than this academic model. In the real world, countries put up substantial barriers.

Second, some would claim that even if trade is less than “free,” the United States still benefits and our consumers get lower prices.

The system has worked pretty well for us so far, right? Just look at how well the U.S. has done economically compared to its peers.

This argument makes more sense, but I would ask, “How do we know?”

That is, how do we know that tactical tariff threats to extract an even better deal for us won’t work better?

That is not a strategy we have pursued actively in almost a century. We certainly have never pursued it in the modern world.

There is another popular Wall Street saying that says, “If you owe the bank $100, you have a problem. If you owe the bank $100 million, they have a problem.”

The idea is that an outsized liability is as much a problem for the borrower as the lender.

This sums up our trade imbalances with these three large partners.

They buy a lot more from us than we do them, and it makes up a much bigger part of their economy. This is a strength for them but also a weakness.

Here is a post from X with the data.

In the wake of the tariff threat with Canada and Mexico, many pointed out that exports to the United States made up 20% and 35% respectively of their economic output. The corresponding number for the United States was around 1.5%.

They are much more vulnerable than we are economically and there are real imbalances. Imbalance politically and economically that we are valid to ask to be addressed.

That brings us back to my question — what happens if Trump wins?

He goes out and threatens tariffs and other actions against our largest trading and economic partners and extracts benefits for our economy.

I think the stock market goes higher — potentially a LOT higher.

Not only will we reap the benefits of the value extracted, but we also remove the “risk” of the apocalypse that is being fed to us all by the media and the “smart” money.

I don’t know that this will be the outcome. But we are about to find out in the coming months.

Market Wizard’s Wisdom

An “Under-the-Radar” Market Wizard

One of our favorite books series of all-time are the Market Wizards books published by Jack Schwager.

Schwager does a great job of interviewing all manner of traders and diving into their methods.

Some of these traders are amongst the most well-known in finance history. Many, however, are little known outside of the inner circles of the industry.

Today, we are going to highlight the wisdom of one of these lesser-known Market Wizards – Linda Raschke.

Raschke began her professional trading career back in 1981 as a market maker on the San Francisco based Pacific Stock Exchange and later moved to the Philadelphia Stock Exchange.

Raschke co-authored a best-selling book about trading, Street Smarts-High Probability Short Term Trading Strategies, with Laurence A. Connors.

After 40 years as a full-time professional trader, Linda retired and wrote a follow-up book, Trading Sardines: Lessons in the Market From a Lifelong Trader.

Here is a list of some of her best trading wisdom.

1. Buy the first pullback after a new high. Sell the first rally after a new low.

2. Afternoon strength or weakness should have follow through the next day.

3. The best trading reversals occur in the morning, not the afternoon.

4. The larger the market gaps, the greater the odds of continuation and a trend.

5. The way the market trades around the previous day’s high or low is a good indicator of the market’s technical strength or weakness.

6. The previous day’s high and low are two very important “pivot” points, for this was the definitive point where buyers or sellers came in the day before. Look for the market to either test and reverse off these points, or push through and show signs of continuation.

7. The last hour often tells the truth about how strong a trend truly is. “Smart” money shows their hand in the last hour, continuing to mark positions in their favor. As long as a market is having consecutive strong closes, look for up-trend to continue. The up trend is most likely to end when there is a morning rally first, followed by a weak close.

8. High volume on the close implies continuity the next morning in the direction of the last half-hour. In a strongly trending market, look for resumption of the trend in the last hour.

9. The first hour’s range establishes the framework for the rest of the trading day.

10. A greater percentage of the day’s range occurs in the first hour then was the case in the past, and thus it has become increasingly important to trade aggressively if there are early signs of a strong trend for the day.

11. There are four basic principles of price behavior which have held up over time. Confidence that a type of price action is a true principle is what allows a trader to develop a systematic approach.

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].