Proflex Market Update - Wk 36
Dear Subscribers,
We are back with our commentary on recent market action and outlook for the economy. It is a short week due to long weekend but this week signifies start of a historically tough month for markets.
Market has failed to break through the resistance levels:
The markets have digested the final and most crucial earnings of the season, with Nvidia (NVDA) once again surpassing expectations. However, while the guidance was better than anticipated, it didn’t exceed expectations by the same margin as previous quarters.
With most of the positive news now behind us—including a confirmed rate cut expected at the September FOMC meeting—markets are entering a typically weak September, with limited upside remaining. The market’s inability to break all-time highs despite good news is a technical concern for market momentum.
We are forming a double top pattern on S&P 500 with technical weakness. We will further discuss how this ties up with fundamental lack of liquidity in market. But the correction is a good time to consider adding to strong fundamental stocks in AI trade as well as stocks that will benefit from upcoming rate cut cycle.
Fed is trying to absorb liquidity out of markets Adding to the pressure on risk assets, we’re seeing an increase in demand for the Fed’s Reverse Repo (RRP) facility. The Fed’s move to absorb excess liquidity through increased overnight repo auctions has drawn significant liquidity out of the market. This preference for short-term investments, driven by lower yields from anticipated rate cuts and market topping, has been evident in the last few days. We are seeing risk-off trades across all asset class - whether it is Stocks, precious metals, or crypto assets. As per the RRP numbers updated last weekend, we have seen $120B+ liquidity taken out of market since a week before. These numbers are to be watched carefully for further market implications. Bitcoin still struggling from sale of Mt Gox assets Free Weekly Insights
Get This Analysis Every WeekJoin 250+ investors at Google, Amazon & Apple who start their week with Proflex. No spam. Unsubscribe anytime. Meanwhile, Bitcoin continues to struggle under the weight of liquidations from Celsius, Mt. Gox, and other creditors. Specifically for Mt Gox creditors, who have seen their capital multiply over the past decade, are now looking to liquidate. They have seen their money locked for 10 years but they also got 100x+ returns on their investment by forced locking of funds. This is expected to keep the crypto market in a consolidation phase until liquidity conditions improve. Fundamentally nothing has changed but liquidity on both buy and sell side are thin on exchanges leading to bigger price swings. Precious metals are strongest asset class in 2024 Precious metal rally is also taking a break in low liquidity period and consolidating at support areas, but this asset class is looking strongest in the market that is struggling to find future direction. Our All-Access members are aware how strong we feel about a precious metals bull run in 2024 and we have taken advantage of this in our portfolios. We are looking forward to how the breakout continues to play out. Proflex All-Access Continues to Outperform with Timely Market Insights and Strategic Trades For our All-Access subscribers, we navigated the recent market turbulence effectively, identifying key opportunities during the August correction. As always, we emphasize filtering out the noise and focusing on actionable insights. We appreciate the ongoing feedback from our subscribers and remain committed to helping you stay ahead in this dynamic environment. If you haven’t already, consider joining Proflex All-Access for deeper insights and more customized trading strategies. Proflex All-Access: Your Market Compass Explore the financial markets with Proflex All-Access, your comprehensive resource for deeper market understanding and active participation. This premium service offers subscribers exclusive insights and actionable investment advice, giving you a significant edge in various market conditions. Proflex All-Access provides detailed analyses and recommendations to optimize your investment strategy. Our specialized newsletters include: • Growth Gazette: Aimed at achieving above-market returns for aggressive portfolio growth. • Income Insider: Focused on conservative strategies and income generation for yield-seeking investors. • Crypto Pulse: Offers advanced strategies for investing in the rapidly expanding cryptocurrency market. Thank you for your continued trust and engagement. Feel free to send us your queries at proflex@proflexfinance.com Best regards, Raman Bindlish Editor-in-Chief, Proflex Finance 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. |