Proflex Market Update - Wk 38​
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Tech Bulls Roar | Fed Cues Confidence | Overbought Warnings

Last week saw markets continue their impressive bull run, with the S&P hitting significant new highs, fueled by the tech rotation & Fed's dovish update that we’ve consistently highlighted since the Jackson Hole pivot.
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The Federal Reserve initiated its expected rate-cutting cycle in September by a 25bps rate cut, assuaging doubts with its clear focus on unemployment.

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While macro tailwinds suggest a strong medium-to-long term outlook, short-term technicals point to a frothy market, warranting immediate caution.

Proflex Investor Day — October 5, 2025

Our quarterly Investor Day has become one of the most valuable learning and networking experiences for our community.

At these events, we’ve shared the mega trends shaping markets and paired them with clear, actionable strategies for investors.

We’ll walk you through macro trends, options frameworks, income & hedging strategies, and mindset tools — with curated networking to sharpen your playbook.

📅 Date: Sunday, October 5, 2025
📍 Location: 400 Santana Row, San Jose, CA
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Key Drivers This Week

Fed Policy Pivot: Cuts Confirmed, Unemployment in Focus

As widely anticipated, the Federal Reserve initiated its rate-cutting cycle in September 2025, reducing the federal funds rate by 25 basis points to a new range of 4.00%–4.25%.
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The accompanying rhetoric, emphasizing slowing job gains and a slightly edged-up, yet still low, unemployment rate, further solidified market confidence in a dovish pivot.

The Fed’s “dot plot” now signals further easing, with a median expectation for the fed funds rate to fall to a range of 3.5%–3.75% by the end of 2025, indicating that this is merely the first cut in a series.
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This policy trajectory provides significant macro tailwinds, but the market must now price in this new reality without overshooting.

Gold's Rally: A Leading Indicator of Asset Inflation

Gold has continued its robust rally, serving as a powerful leading indicator for the broader asset inflation that lies ahead.
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Investors are buying gold at record-highs while U.S. Dollar Index fell 10.1% in September, marking its steepest monthly decline in more than three decades.

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As the dollar persistently devalues in response to lower interest rates and elevated money supply, capital is actively rotating into tangible assets.
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Smart money is positioning for a period where real assets outperform financial assets, driven by persistent inflationary pressures and a hunt for value outside traditional equities.
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The resilience of gold confirms this thesis and suggests broader inflationary forces at play.

Q3 Earnings: The Next Litmus Test for Momentum

With the immediate Fed uncertainty removed, the market’s focus will soon pivot to Q3 earnings season, set to begin in roughly a month.
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This will be the next major catalyst, determining whether corporate fundamentals can justify current elevated valuations, especially within the tech sector. Until then, expect the market to consolidate or show increased choppiness.
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​Strong results will provide the impetus for the next leg up, while any significant misses could trigger a much-needed correction from overbought levels. This period of anticipation demands vigilance.

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🧭 Proflex Playbook – Rate Cuts Are Here, Capital Rotation Next

The market's enthusiasm for rate cuts and tech leadership is palpable, but tactical caution is warranted in the short term. Our stance remains anchored in identifying structural macro tailwinds while sidestepping immediate risks.

Our stance stays anchored in the data:

✅ Stay Long Hard Assets — Bitcoin, gold, and silver have front-run policy
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✅ Lean into AI's Second Wave — Beyond core leaders, look for rotation into "laggard" tech names like Apple that have significant upside.
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✅ Position for Deeper Rate Cuts — Despite contrarian voices, the market is pricing in cuts, and this liquidity injection will fuel risk assets.
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✅ Actively Manage Risk Around Key Events — The FOMC meet and Apple launch present immediate volatility and opportunity.

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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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