Proflex Market Update - Wk 22

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Rally Fueled by Sentiment and Liquidity​
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Markets entered this shortened week on a strong note, continuing the momentum from last week’s rally—fueled largely by Trump’s tariff delay on the EU. While it’s surprising that markets still react to these tariff announcements, the pattern has become familiar: volatility from unpredictable political headlines, followed by retracements or surges depending on how negotiations evolve.
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As we discussed in detail at our recent Investor Day, the macro tailwinds remain intact:

• M2 money supply continues to expand, providing underlying support to asset prices.
• Bond markets are fragile, as evidenced by heightened anxiety around every new auction. Just this week, Japan’s 40-year bond auction triggered global concern—yet its successful completion calmed yields and stabilized sentiment.
• This shows how the liquidity narrative and confidence in sovereign debt remain pivotal to sustaining the rally.

From Peak Pessimism to Peak Optimism

We are now witnessing the swing in sentiment that we predicted in April:

• Tech earnings have been solid, with multiple companies confirming sustained AI momentum and optimism.
• Consumer confidence has rebounded.
• Trade war panic has eased (for now), as markets digest the “new normal” of Trump’s negotiation tactics.

However, easy money is likely behind us. With the S&P 500 and Nasdaq approaching all-time highs, the market must now confront:

• Stalled tax reform efforts in the Senate
• Ongoing (and likely protracted) trade negotiations with China, the EU, and others
• And the ever-present issue of ballooning U.S. deficits and Treasury funding requirements

As we’ve said before: the market can live with bad news—it just can’t live with uncertainty. Now that many worst-case scenarios are priced out, it’s time to stay nimble.

NVDA earnings

NVIDIA’s earnings this week are shaping up to be one of the most pivotal events for the market in short term. The company has been the undisputed leader of the AI boom that has fueled equity markets over the past two years, with its GPUs powering everything from ChatGPT to enterprise-scale AI infrastructure.

While NVDA has continued announcing record-breaking deals across hyperscalers and sovereign clients, the one-time inventory write-down related to H20 chips for China, driven by new export restrictions, cast a shadow on its last earnings and hurt investor sentiment.

But the big question now is: Was that the worst-case scenario?

With the stock consolidating near its support levels and valuations becoming increasingly attractive, there’s a strong case to be made that the market may be underestimating NVIDIA’s forward momentum—especially if gross margins hold up and demand outside of China continues accelerating.

If NVDA beats on both earnings and guidance, it could reignite the AI trade and be the catalyst that propels the S&P 500 and Nasdaq back toward all-time highs—perhaps within days. All eyes are on this report.

Proflex Playbook – Stay Hedged, Stay Rational

Our recommendation to subscribers is simple:

✅ Avoid chasing rallies.

✅ Keep cash on hand.

✅ Use volatility to your advantage through options.

✅ Book profits into strength.

If you’re in our All-Access or Managed Portfolios, you’ve already seen the benefit of this approach. In April’s carnage, we held firm, added selectively, and have now booked gains across multiple core positions.

💰 Bitcoin Consolidates near $110K

Game Theory in Action​
Bitcoin is now holding firm above the $100K mark, consolidating around $110K. The narrative is shifting from ETF inflows to institutional and corporate treasury adoption:

• Every other day, a new company is announcing adding BTC to its balance sheet and new Bitcoin treasury company is formed.
• This trend is compounding, and we are witnessing a live case of Bitcoin game theory playing out globally.
• It is no longer speculative—it is strategic capital allocation.

Our Crypto Pulse and All-Access subscribers were guided to accumulate through March–April volatility, and the results speak for themselves.

We believe this Bitcoin wave is not over, and Proflex Crypto Pulse will continue covering key signals to watch. As always, reach out if you’d like to hedge your crypto exposure or allocate intelligently.

🧭 Final Thoughts​
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This is not the time to be complacent.

Yes, the rally has legs, but we’re entering technically stretched zones across major indices.

Be patient. Be strategic. Let volatility work for you—not against you.

If you haven’t yet joined our macro WhatsApp group, or want to explore Proflex Managed Portfolios, now is a great time to reach out.

If you’ve missed our Friday calls, now’s the time to join! These calls have offered actionable insights through uncertainty and helped investors when fear was high.

📢 Join the Discussion in Our Macro WhatsApp Group!​
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We’ll continue to navigate this market with discipline—and help you do the same.

Stay sharp,

The Proflex Team

Trusted Macro Insights. Calm Investing. Tactical Trades.

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