Proflex Market Update - Wk 32​
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AI's Enduring Power | Fed's Rate Cut Pivot | Market's Needed Breather

Markets saw record highs last week upwards of 6427, then a sharp correction post-jobs report.

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The market's “fear” following the weak July jobs report missed the bigger picture.
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This data decisively forces the Fed's hand towards easing, effectively unlocking the next phase of the bull run.
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The recent dip, while sharp, was a long-awaited profit-taking opportunity, not a fundamental shift in macro conditions.
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Consider the context: Nasdaq was up a staggering 45% and the S&P 500 up 32% since April lows in just one quarter. This rapid ascent made a breather inevitable.
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​The recent consolidation is a healthy rebalancing, necessary for a sustainable longer-term uptrend.

Insights from the Proflex Macro Call

"This Isn’t a Breakdown. It’s a Burnoff."

One of the sharpest takeaways from this week’s Proflex macro discussion: the current market downturn isn’t the start of a bear market—it’s a normal, technical reset after an overheated rally.

Despite political noise on U.S. debt, capital is flowing into Treasuries, especially the 7-year auction, and the U.S. dollar remains a safe haven.
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The bond market isn’t panicking, and long-term yields are softening, not spiking—confirming that this is a shakeout, not a macro reversal.

Even inflation, often viewed as a threat, is being driven by tailwinds like tariffs—but the estimated CPI impact is just ~1% and likely short-lived.
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With AI infrastructure exempt, the real growth engine remains untouched.

You can watch the recording of the full weekly discussion here:

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Key Drivers This Week
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The Fed's Imminent Pivot & Yield Compression

The unexpected softness in the July jobs report has fundamentally shifted the narrative for the Federal Reserve. A September rate cut is now “more or less guaranteed” unless inflation data surges unexpectedly.
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Yields have already dropped heavily in anticipation, reflecting the market's clear expectation of a more accommodative stance.
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This pivot, previously advocated by Trump's rate cut calls, places the Fed in a reactive position, solidifying the path for lower borrowing costs.
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Market Volatility & AI's Unfinished Story​
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The market's sharp reversal after hitting new highs, triggered by Friday's jobs report and coupled with options expiry, created a critical profit-booking opportunity. ​
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The core thesis stands: the AI trade is still in its early innings, representing a long-term trend that could play out over the next decade. Expect some consolidation in the near term, but macro indicators continue to favor a longer bull run.
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Tariff Uncertainty & Geopolitical Overhangs

While recent trade uncertainties have seen some resolution, the overarching specter of tariff uncertainty remains a persistent undercurrent.

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This lingering factor will continue to keep the market on its toes, influencing day-to-day moves and sentiment.

Expect geopolitical headlines to introduce short-term choppiness, serving as a reminder that macro risks, though sometimes overshadowed by earnings, are ever-present. This demands a nimble approach to tactical trading.
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👉 Looking for ways to hedge against geopolitical volatility while still capturing upside?

🧭 Proflex Playbook – Liquidity is Here, Earnings Are Next

We are at a critical inflection point. The market isn't breaking down; it's shedding froth, preparing for the next leg up catalyzed by impending Fed easing.
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The message is simple: we ran up too fast, and a healthy rebalance is in play before the next surge. ​
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Our stance remains rooted in positioning for the long-term structural shifts while staying tactical amidst near-term volatility.

Our stance stays anchored in the data:

✅ Stay Long Hard Assets — Bitcoin, gold, and silver have front-run policy
✅ Trade Equities Tactically — Let earnings decide who earns the premium
✅ Hedge for Volatility — Tariffs + Fed + FX = high optionality zone
✅ Monitor Fed Tone Closely — Be prepared for bond market volatility driven by Powell's guidance, not policy action.
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If you're an All-Access or Managed Portfolio subscriber, our positioning has already shifted ahead of this moment—scaling up asymmetric hard asset plays while hedging for earnings volatility and geopolitical tail risks.

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Until next week,

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— The Proflex Team
​ Trusted Macro Insights. Calm Investing. Tactical Trades.

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