HX WEEKLY

Hello reader, welcome to the very first issue of HX Weekly!

As you probably know, we stopped publishing HX Daily back in February.

Since then, we've been very focused on the beta for our algorithmic trading platform, Signal Trader Pro. We're incredibly proud of it and are prepping for an official launch on May 1^st . Check out our Signal Trader Pro site here if you haven't seen it.

So, what's HX Weekly all about?

Well, each Friday, we'll 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!

I: Thoughts on the Market – Are Trump’s Tariffs Just a Negotiating Tactic?

As we all know by now, on Wednesday, President Trump announced a slate of universal tariffs that were far more aggressive than anybody anticipated.

Trump dished out tariffs like Oprah once famously handed out free cars to everyone in her audience.

You get tariffs, China! You get 37% Botswana! We see you hiding McDonald Islands… you get 10%!  

Yes, Trump actually placed tariffs on the McDonald Islands, which sit 2,485 miles southwest of Australia - they are only accessible via a seven-day boat trip from Perth and haven't been visited by humans in almost a decade. The island's primary inhabitants are, in fact, penguins.

Australian Trade Minister Don Farrell told the Australian Broadcasting Corporation (ABC) that the tariffs were "clearly a mistake."

"Poor old penguins, I don't know what they did to Trump, but look, I think it's an indication, to be honest with you, that this was a rushed process."

So, while many investors hoped that the worst news had already been priced in, Trump's announcement sparked a massive global selloff that has continued through Friday.

In the meantime, many market experts, economists, and the penguins of the McDonald Islands are wondering just how seriously we should take these tariffs.

In fact, one look at how tariff rates were calculated immediately raises suspicion. CEO alternative investment firm Accelerate Financial Technologies – Julian Klymochko – detailed this on Wednesday in this post on X:

So, if the calculations used to derive the tariffs are contrived, we must ask, are these tariffs real, or just a negotiating tactic by Trump?

After all, Trump fancies himself a master negotiator, as documented in his famous book, The Art of the Deal, which was released in 1987.

A memorable Trump quote from that book may provide some insight. "My style of deal-making is quite simple and straightforward. I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after."

Could this type of thinking reflect Trump’s use of tariffs as a negotiating tool—applying pressure on trading partners to secure better trade terms for the U.S.?

By issuing these tariffs universally and aggressively, has he, in fact, just invited the world to the negotiating table?

The President's son, Eric, who has worked alongside his father his entire life, thinks so. He mentioned so in this post on X yesterday.

So, while the tariff strategy is more aggressive than expected, the key question now is how quickly adjustments will follow. While many assume the tariffs will remain unchanged, this thinking may disregard Trump's well-documented history. 

True to form, Trump has set the stage for high-stakes negotiations by creating pressure and uncertainty.

Today, China responded with reciprocal tariffs. In Trump’s mind, does this make them the first to step into the negotiating arena? While this escalation adds to market volatility, it may also signal that the deal-making process is underway.

So, what should we do as investors?

In times like these, we believe it's critical to stay tuned to the news for any signs of meetings with key trade partners like China or the EU. Announcements regarding favorable concessions or exemptions could come at any time and will likely trigger a sharp rally in global markets. You need to be prepared for that situation should it arise.

For now, stay calm, form your plan, and be prepared to trade the plan quickly upon any positive news.

II: HX Daily Redux – How to Manage Your Investing Bankroll

Today, we’ll revisit an HX Daily post from February 16^th of last year titled "How to Manage Your Investing Bankroll."

The key message of that piece is crucial for those looking to “buy the dip” or deploy capital in this tumultuous market.

Now, for frequent readers, you’ll know that here at HX Research, we enjoy gambling from time to time.

Of course, our trades have a much higher chance of working out than picking red or black at the roulette table. But as with gambling, investing does include a chance of losing your money.

That’s why the most important thing you can do as an investor is to be disciplined.

Whether gambling in Vegas or investing in the stock market, one of the first things you should do is lay out your goals.

We have always enjoyed blackjack because it’s the casino game with one of the smallest house advantages and involves math.

We have two goals when we play: to enjoy ourselves and try to win money.

In investing, “enjoying yourself” is a valid goal, too. Investing can be intellectually engaging. It lets you learn about new businesses, economics, human behavior, and psychology.

But unlike gambling, you are not at a mathematical disadvantage when you invest (if you do the work and maintain your discipline).

When we walk up to the blackjack table, we make two decisions ahead of time: how long we want to play and how much money we’re willing to gamble (and potentially lose). Then, we either lose it all (and walk away from the table) or double our money (and walk away from the table).

This approach has treated us well on the blackjack tables – and in the stock market – over the last 30 years.

In blackjack and investing, we live by the same saying: “Plan the trade, trade the plan." The same advice can apply to both…

• Never gamble (or invest) your rent money or mortgage payment

• Stick to your bankroll.

• Have an exit strategy.

The only difference is that the house doesn't have an edge when it comes to investing. You do if you’re willing to do the work!

By now, you're probably thinking, "Cool story, but what does any of this have to do with deploying capital in times like these?"

Well, this is where stop losses come into play as part of your "plan."

Stop Losses: A Key Part of Our Investing Tool Kit

When it comes to the stock market, managing your money is imperative.

But there’s a difference between “trading” and “investing.”

Trading means focusing on tactical opportunities across a short time frame (a few days to a few months). This is where you can take advantage of technical factors, like a stock seeing buying demand from being included in an index… short-selling into the expiration of an IPO’s lock-up period… or simply buying great companies when the rest of the market gets panicked.

These are primarily technical or tactical factors based on the stock rather than the company's fundamentals. As regular readers know, we look for these types of opportunities. Still, we make sure we’re buying companies with solid fundamentals, too. This approach allows us to identify stocks with a high "hit rate" while minimizing losses.

“Investing," conversely, means taking a longer time frame – sometimes years or even decades. I spent most of my career on Wall Street looking for these types of investments, and we write about them in our publication, HX Legacy.

One of the most important ways to minimize losses is to use stop losses.

Simply put, a stop loss is a determined price at which you will exit a position.

Stop losses can take many forms: hard stops (a specific price level) and trailing stops (which change as the stock moves higher) are the most popular.

No matter which one you use, stop losses, instill discipline, take the emotion out of investing, and help minimize your losses.

So, for the brave out there willing to deploy capital during this market downturn, remember to make “stop losses” a key feature in your trading plan.

III: Market Wizard’s Wisdom – William O’Neil

A few investors and writers have had an outsized influence on our investment philosophy.

The most important of those by far is William O'Neil. In fact, his wisdom is so impactful that it's built into the underpinnings of our algorithmic trading platform, Signal Trader Pro.

O'Neil was born in 1933 in Oklahoma City and grew up in Texas, where he studied business at Southern Methodist University and served in the United States Air Force.

He began his career on Wall Street at stockbroker Hayden, Stone & Company and was one of the first to use computers in developing an investment strategy. At 30, he founded his own company – William O'Neil + Co. Inc. – and bought a seat on the New York Stock Exchange.

His company developed the first computerized daily securities database and pioneered quantitative analysis of stocks. He eventually launched a business newspaper, Investor's Business Daily, and authored several books.

The most famous of these books is "How to Make Money in Stocks," published in 1988. If there were one book we could recommend on investing it would be THIS book.

O'Neil's system (called "CANSLIM") encapsulates what we consider the best and most successful investment strategies.

Now, given the chaotic nature of the market this week, we decided to share some of O’Neil’s best-known quotes to shed perspective and refocus our attention on the big picture.

Here are three quotes from O’Neil that capture some of his wisdom…

We think this quote is especially meaningful given the extreme tariff-driven fear in the markets this week. What we like about this quote is O'Neil's insight that the markets don't really change. As long as we have human beings actively involved in them, we will have emotions play a role.

Like the quote above, this wisdom is essential during weeks like this. Sometimes, when market chaos reigns and everything feels uncertain, you need to understand that the best thing to do is probably nothing. Focus on your health, family, etc.

O'Neil also captures the critical role of your frame of mind. Mastering your psychology and putting yourself in a position to win is an absolute must to be a successful investor.

This is literally the most crucial aspect of trading and one that very few investors acknowledge.

The existing stock market environment will drive the majority of the short-term price action.

As a trader, you can make money in both BULL and BEAR markets, but the strategy will be different.

Both types of markets persist for a while and create well-established trends.

The FIRST decision you must make every day when trading is to decide what type of stock market environment we are in at THAT moment.

IV: In Conclusion

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