Proflex Market Update - Wk 9

Proflex Market Update

Dear Readers,

As we embark on a new week, it's crucial to reflect on the remarkable journey the S&P 500 has embarked upon. For seven consecutive weeks, the index has been making new highs, with only one week in the last seventeen not marking a new pinnacle. This four-month rally, marked by relentless ascent with just a minor correction, signals a period of extraordinary bullish momentum in the markets. However, it's important to caution that we might be overdue for a correction, considering the extent and duration of this rally.

FOMC tailwind is disappearing fast:

Turning our attention to the Federal Open Market Committee (FOMC), the initial predictions of an interest rate cut that fueled this rally have significantly diminished. Currently, there's almost no expectation for a rate cut in the upcoming March meeting, and the likelihood remains very low for any cuts before the June meeting. This adjustment in expectations has been fully absorbed by the bond market, yet the equity markets continue their relentless climb. This marks the first significant divergence in stock and bond price movements we've witnessed in over six quarters, suggesting a potential disconnect that investors should monitor closely.

Tech rally getting narrower:

Moreover, the nature of the rally has shown signs of narrowing. Among the mega 7 - the top seven stocks by market capitalization - a clear divergence is evident. NVIDIA (NVDA), Meta Platforms (META), Amazon (AMZN), and Microsoft (MSFT) continue to outperform the S&P 500, largely driven by the hype surrounding artificial intelligence (AI). Interestingly, Google, despite its deep expertise in AI, is not keeping pace with its peers. Meanwhile, Apple (AAPL) and Tesla (TSLA) are experiencing a tougher year, with negative year-to-date returns, indicating a shift in investor sentiment within these market leaders.

Crypto continues to remain strong:

The crypto market continues to demonstrate resilience and strength, with Bitcoin steadfastly consolidating at the top of its accumulation range between $50,000 and $52,000. This consolidation phase highlights the market's optimism and underlying support for Bitcoin. Concurrently, Ethereum is riding a wave of significant momentum, spurred by the excitement surrounding an upcoming network upgrade and the buzz over a potential ETF approval, which could further catalyze its value.

Amidst these developments, the anticipation for the newly launched Bitcoin ETFs to enable options trading is palpable among our community. This move is poised to unlock novel strategies for our Advanced Trader portfolios, offering a beacon of hope for subscribers eager to engage with the crypto market in a hedged manner, particularly those who feel they've missed out on the earlier phases of the crypto boom. In the forthcoming weeks, we plan to leverage our proprietary algorithm platform, Amped Advantage, to introduce new positions in the crypto domain. This initiative, exclusive to our All-Access members at no additional cost, is aimed at providing a strategic entry point into the crypto market, marrying opportunity with risk management in a manner that aligns with our subscribers' aspirations for growth and security in the volatile crypto landscape.

Important Note: Do not forget to subscribe to All-Access subscription to continue receiving specific portfolio updates including Advanced Trader recommendations.

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{{ product.price }} {{ product.title }} {{ product.button_text }} {% endproduct %}​ Other Actionable Insights and events this week: PCE data on Feb 29: Fed is expecting a lower PCE number for January with headline number to be down to 2.4% and core PCE down to 2.8%. If there are any shock on upside, this can trigger a panic in the market. We are still watching the bond yields closely for any signs of stress that can cause the markets to reverse course. Tech earnings: There are some interesting earnings number coming out this week for tier-2 tech companies like SNOW, OKTA and ZS. It will be critical to see if AI and cybersecurity stocks continue their earnings momentum and justify the hype in these sectors. Stay tuned for further updates, and as always, we're here to help you navigate these dynamic market conditions. Best regards, Raman Bindlish Editor-in-Chief, Proflex Income Insider, Growth Gazette & Crypto Pulse ​ ProFlex® by Proflex Finance​ ​Legal Disclosures ProFlex® by Proflex Finance, the premium newsletter product series, provides informational and educational content only and does not offer personalized investment advice or establish a fiduciary relationship. While we rely on reliable sources and research, the information is not tailored to individual financial situations. Readers are urged to consult qualified financial professionals before making investment decisions. We do not guarantee the accuracy, completeness, or timeliness of the information and are not responsible for any investment decisions based on this newsletter. Investing carries risks, and past performance doesn't predict future results. By accessing this newsletter, you acknowledge that we are not liable for actions or decisions resulting from its content. Please conduct due diligence and seek professional advice as needed.