Proflex Market Update - Wk 42

Dear Subscribers,

Last week, tech stocks—especially semiconductors—finally broke out, propelling the S&P 500 to a new all-time high above 5800 level.

Semiconductor leading the market again

We’ve highlighted the need for tech momentum in recent updates, and with Nvidia (NVDA) leading the charge in last week, the market surged. Semiconductor sector has a whole got a great boost with AI trade back in action.

CEO Jensen Huang’s media appearances, discussing Blackwell chip shipments being back on track, have significantly boosted NVDA’s outlook and reignited market optimism. In addition, lot of good news has started coming back to market before earnings season on semiconductor industry. This bodes well for overall market as we were missing this key leadership in past few weeks.

Rising Bond Yields and Economic Data

Bond yields are rising again, driven by stronger-than-expected economic data. While this has dampened hopes for a 50bps rate cut, it reassures the market that the economy remains robust, as we emphasized in last month’s all-access subscriber call.

Markets have to navigate this new scenario where we are again seeing bonds and equity diverging and the data needs to be monitored carefully as we enter critical year-end FOMC meetings where market is expecting 25bps cut in both November and December updates.

Historically, rate cut cycles have been linked with slower growth, but this time, strong data reduces recession fears.

Moreover, the rapid depreciation of the Yen against the USD has eased concerns around the carry trade. The stronger dollar is now creating a tailwind, allowing for higher leverage in these trades.

Bitcoin’s Test and Consolidation

Bitcoin faced multiple tests last week, briefly dipping below $60k before rebounding above $64k. The cryptocurrency is still consolidating within this range, and the key focus now is whether it can consistently break above its 200-day moving average. We are closely monitoring this level, as a sustained move above the 200DMA could signify further upside for Bitcoin in the near term.

Commodity Market Reaction to China Stimulus

Commodities experienced price increases due to expectations around China’s stimulus activities. However, the market was somewhat disappointed by the size and scope of the stimulus, with follow-up details underwhelming. It remains to be seen whether China’s economy can truly reignite growth, but for now, the market is cautiously optimistic. China’s ability to bounce back will be a key factor to watch in global commodity markets moving forward.

Our all-access subscribers have seen us make some profitable trades in Gold, Copper and Oil markets with a great uptrend in metals continuing and presenting a once in decade opportunity to benefit from the upcoming commodity boom. We are excited about the recent market action and watching the various factors carefully that can impact this bull run.

Proflex All-Access Continues to Outperform Markets

For more insights on how to capitalize on market volatility and stay ahead in this dynamic environment, consider joining Proflex All-Access.

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Feel free to send us your queries at proflex@blockstart.one

Best regards,

Raman Bindlish

Editor-in-Chief,

Blockstart Research

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