The Flinches Heard Round the World.

I hosted a State of the Market show on Friday morning for around 300 attendees and I explained that bearishness was, and still is, about as strong as I've seen it in many years. Maybe decades. AAII bearishness showed more than 50% of respondents as bearish for the 11th straight week. We haven't seen that in.... well, ever. 35 years of data.

This isn't a "fear of missing out" market (FOMO). It's a fear of "I'm on the sidelines and it HURTS market".

That is very dangerous for bears who've erroneously decided to sit out American Exceptionalism for now. That exceptionalism isn't going anywhere. The US leads in probably 9 of the top 12 tech/innovation industries. Since before my show with Samantha 4 weeks ago I've been warning that the pain point was up. I told Brent from Spot Gamma that there was more bearishness to unwind.

Imagine fund managers looking at this and thinking of how they are about to underperform by LIGHT YEARS if they don't do something about it. The exodus of foreign money may also reconsider abandoning the US at some point.... more fuel to the upside.

🌳Our Hedged Income LEAPs portfolio is up +18.5% this year versus QQQ down -7% and SPY just about even. Four of our names are either making new all-time highs or a few percent away from one. We have made a bunch on hedges and income trades to boot (remember the port was hedged on the way down). It's a special portfolio. ****I'll be opening the strategy up to new members soon (and you can learn it in the mentoring program, see below). Stay tuned for how to get involved.

The Pulse

Markets love clarity—and clarity showed up wearing a suit in Riyadh, shaking hands and lifting sanctions.

In case you missed it, the President's speech at the Saudi-US Investment Forum wasn’t just geopolitical theater. It was a pivot point. We got:

• A surprise easing of tension with Syria (yes, really)

• An olive branch to Iran - with a “don’t push it” tone

• And a recommitment to stability vs conflict across the Middle East.

Flinch, flinch, flinch. From markets feeling sheer terror 30 days ago to flinches doled out like candy on Halloween. Trump is suddenly everyone's friend again.

Meanwhile, tech and chips took the baton and ran. Nvidia’s partnership with Saudi Arabia’s new AI venture "Humane" means hundreds of thousands of advanced GPUs will ship over five years. Oh—and the U.S. just gave the green light for Middle East exports of these high-powered chips. A previously locked door is now wide open. Flinch.

The result?🔹 Nasdaq rips higher.🔹 S&P is flirting with new all-time highs.🔹 Strategists are playing catch-up—again. Big Wall Street VIP strategists raising their S&P targets after dropping them several times. How useful.

Piper Sandler says “Offense takes the field.” Wells Fargo: “Ceilings become floors.” Ed Yardeni just bumped his S&P target to 6,500. Markets are pricing in peace, growth, and another shot at AI-driven upside. I'm a believer. I'm happy to have pivoted away from bear on semis last week. Better late than never. I added NVDA LEAPs today as well as one of my Turbo Trades in the name.

What else? On my show Friday I gave out a free trade: long NVDA August calls and long GOOG August puts. Doing very well. I gave out an Uber upside June 90 call play that I closed out for a 340% gain this afternoon. No joke.

📊 EARNINGS + INFLATION = TAILWIND

As I always like to say, I don't mind high-ish rates and a little inflation as long as growth is good and folks are employed. The growth scare of three weeks ago is long gone.

• 90% of S&P companies have reported.

• 78% beat on EPS.

• CPI came in at 2.3%—lowest since Feb.

  
  

Sure, these are backwards looking to some great degree.... but these are not the metrics of a market in trouble at the margin.

We’re not just climbing the wall of worry—we’re wearing jetpacks.

⚠️ WHAT TO WATCH NEXT

1. Tariff math. Tariff rollback = lower input costs, but we’ll need to see how much demand was “pulled forward” during the trade war peak.

2. The Q2 earnings setup. Strong Q1... but now expectations are high. If guidance gets soft, we could see rotation. Maybe. As I've been saying on shows for weeks, I think the market will look past the eventual slowdown from pull-forward - transitory. Yesterday's news. Buy that point it will be about done deals, and tax/regulatory tailwinds.

3. Tax policy and CapEx. How stimulative will it actually be? Too hot and we get rates pressure again.

   
   

📌 FINAL THOUGHT

The geopolitical tone has shifted—from aggression to accommodation. Markets are sniffing that out fast. We’ve moved from “brace for war” to “position for peace dividend.” And guess who loves peace? Margin expansion.

If you’re sitting in cash, the opportunity cost just went up.

Stay sharp out there. And remember—markets don't wait for clarity. They front-run it.

May the income be with you,

Hans

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