"The S&P bounced beautifully, straight into its 200-day moving average. This week, the Strait stays shut, Trump's deadline expired unanswered, and March CPI drops Thursday. The market is in the in-between. That never lasts long."
— Proflex Panel
Last week gave bulls what they needed: the S&P 500's first weekly gain in six weeks, up 3.4% — its best week in four months.
Panic selling absorbed five weeks of war-driven losses, short sellers covered, and the index clawed back to 6,582 before markets closed for Good Friday.
But the bounce ran straight into a wall.
The 6,600–6,660 zone — where the 200-day moving average converges with the war's descending trend line — rejected every attempt to close above it. The Thursday intraday high barely tagged 6,601 before pulling back. As we outlined in Week 10 when 6,700 was the must-hold level, these zones don't yield cleanly because they require a catalyst. This week, the calendar delivers several.
Three collision events are converging as markets reopen this week: 1) Trump's April 6 ultimatum for Iran to reopen the Strait of Hormuz expired this morning with Tehran formally rejecting it. 2) Brent is holding its ground And March CPI — the first inflation reading to capture the full oil surge — drops Thursday. 3) The VIX has cooled from its panic peak near 30 to 24-25, but still elevated. The war premium is still fully embedded.
Insights from Proflex Macro Call
The central theme from this week's call was straightforward: the bounce was real, but do not mistake exhaustion for resolution. Raman walked through the key dynamics in detail.
On the S&P 500: the 6,600 level is now the new line. We called 6,700 as the must-hold in Week 10 — that floor broke, the market found a new base, bounced, and has now met resistance at exactly the 200-day moving average and the war's downtrend line. Clearing it requires a catalyst, not just optimism. The VIX cooling from ~30 to 24.54 is healthy — we noted in Wk 11 that a VIX of 30 was pricing an unsustainable 2% daily move — but at 24-25, we are still well above the steady-state 200-day average of ~18. The war premium is priced in. It hasn't left.
On oil and the Strait: Ignore the speeches. Trump's April 1 address ("Operation Epic Fury") was framed by Raman as a sales pitch for US crude exports, not a strategic military update. What matters is whether ships are moving — and the early signs of an Oman coastal corridor (first vessels transiting this week) is the real signal the market hasn't fully processed. If that trickle becomes a pipeline, oil comes down fast. You can watch the complete recording here:
The Resistance Test: 200-Day Moving Average or Roll Over
The S&P 500's best week in four months was also the market bumping into its most watched technical ceiling. The 200-day moving average sits at ~6,641–6,687 — the index closed April 2 at 6,582.69, below it. Markets were closed Friday (Good Friday) and reopen Monday into whatever war headlines the long weekend delivers.
We believe the VIX at 24-25 reflects a market that has digested panic but hasn't resumed confidence. Steady-state for a non-crisis VIX is around 18 — we're still 6 points above that. Dealer hedging pressure has eased; it hasn't reversed.
Two scenarios define the week ahead: A sustained daily close above 6,660 changes the medium-term setup materially — the path to 6,800+ opens and the war correction starts looking like a base. If resistance holds and escalation news re-enters Monday's open, a retest of the 6,400–6,300 zone (September/November 2025 lows) is the next logical support.
Proflex View: The oversold bounce cleared the panic — it didn't clear the problem. 6600 is the line between "relief rally" and "resumption." The 200-day moving average is where every seller who missed the first exit is waiting. A weekly close above 6,660, on volume, changes the narrative. Until then, this is a zone to watch, not a zone to chase.
CPI Thursday: The Number That Could End Rate Cut Hopes
March CPI releases Thursday, April 10. This is the most important macro data point of the week and possibly of the month.
February CPI came in at +2.4% YoY with core at +2.5%. That was the last clean pre-war reading. Since then, Brent moved from $75 to ~$110. Core PCE for January (most recent) was already at 3.06% — above the Fed's 2% target. The pass-through is not hypothetical, it's clearly in the pipeline.
The Fed meets April 28–29. Markets price a 99.5% probability of a hold at 3.50–3.75%.
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But the divergence on what comes after is wide and widening: 1) JPMorgan now forecasts zero rate cuts in 2026; Goldman still models two (June + September). 2) Fed Governor Logan remains hawkish on inflation;Governor Bowman is watching February's 92,000 job losses and arguing for three cuts. 3) The 10-year yield has pulled back from the 4.5%+ danger zone to 4.31% — a relief, not a clearance. DXY hovers near 100.
Proflex View: A March CPI above 3.0% closes the door on June cuts, even for Goldman. That repricing hits the long end of the yield curve immediately. The critical sub-figure is core ex-energy: if oil bleed-through shows up in core, the stagflation thesis goes from Wall Street debate to mainstream consensus. Watch core. That's the number inside the number.
The Earnings Counter-Narrative: Tech Got Cheaper
While the war dominates headlines, a structural counter-narrative is quietly building. Factset’s update for last week saw 2026 SPX earnings growth expectations increasing to +17.4%, up +1.1% the past two weeks and +2.6% since the start of the year.
Like in 2025, Tech is expected to lead earnings growth +37.3% (up +8.7% since the start of the year) followed by Materials +29.4% and Energy +26.0% (up from +6.4% as the start the year), the only three sectors expected to come in above the SPX average
Tech sector earnings expectations stand at +23.7%, with revenue growth of +21.2%. The AI capex cycle hasn't flinched: combined hyperscaler spending in 2026 is now $650–700 billion — Amazon at $200B, Alphabet at $175–185B, Meta at $115–135B, Microsoft at ~$145B. That's a 36% increase over 2025's $381 billion. None of it has been pulled back.
The S&P 500 forward P/E has compressed to 20.96 — essentially at the 5-year median of 21.12. As we've maintained since Week 08 update, the tech bottom forms before the macro resolves. The correction handed investors a re-entry into quality AI names at fair value rather than a premium.
Bank earnings kick off next week: Goldman Sachs (April 13) JPMorgan, Citi Wells Fargo (April 14) These will be the first signals on whether investment banking activity and credit quality have held up beneath the war noise. Tesla will be one of the most important earnings to watch as it reports April 22 with analysts expecting +60% YoY EPS growth.
Proflex View: AI isn't over and the war correction handed a rare re-entry. The capex cycle cannot be cancelled by an oil shock; these are multi-year infrastructure commitments. Bank earnings starting April 13 are the next catalyst cluster. If they show healthy pipelines, it signals the underlying economy hasn't cracked despite the war premium.
Bitcoin & Gold: Same Safe Haven Category, Different Signal
Bitcoin is consolidating in the $65,000–$70,000 zone. The asset's resilience is partly structural: US-Israeli strikes on Iranian mining infrastructure cut global Bitcoin hashrate by ~6% in March removing a persistent seller from the market.
Iran had accounted for an estimated 3–7% of global hashrate since 2019.
Long-term holders have been accumulating since mid-January 2026 — the first net accumulation phase since July 2025. MicroStrategy holds 762,099 BTC at an average cost of $75,694. Michael Saylor's "Back to Work" post on April 5 is his standard signal ahead of a new purchase announcement.
Bitcoin miners, however, remain structurally underwater: average production cost is ~$79,995/BTC versus the current spot price of ~$67k — a margin squeeze that has already triggered miner selling of 15,000+ BTC in Q1.
Gold sits at $4,674/oz, consolidating after its speculative excess cleared. China has purchased gold for 16 consecutive months, building reserves to 2,309 tonnes — now 10% of its total FX reserves. The World Gold Council reports 43% of global central banks plan to increase gold holdings over the next year. This is what we describe as a decade-long allocation shift away from dollar-denominated reserves accelerating under war conditions.
Proflex View: Bitcoin's consolidation reflects a healthy base: panic sellers washed out. The key tell is a sustained weekly close above $70,000 that confirms the base held and opens the next leg. Gold stays structurally bullish but with heightened volatility. Both assets are functioning exactly as they should in a deglobalization environment.
🔍 What We're Watching
March CPI (Thursday, April 10) — first oil-contaminated inflation print; the core ex-energy sub-figure is the one to watch
Oman corridor transit volumes — the real Hormuz signal; each additional vessel is a data point toward logistics resolution
Iran's escalation posture — April 6 deadline rejected; ground invasion risk into Monday's market open
S&P 500 weekly close vs 6,660 — above changes the medium-term setup; below keeps the range intact
Bank earnings (April 13–15) — Goldman, JPMorgan, Citi, BofA; investment banking pipeline = economy health check
MicroStrategy BTC announcement — Saylor's "Back to Work" signal; watch for confirmed purchase
🧭 Proflex Playbook – Discipline Over Direction The market is caught between a geopolitical crisis it can't model and a structural expiry event it can time to the hour. This is a week for tactical discipline. Our conviction stays anchored in the data:
Focus on Structural Growth: Continue to overweight the secular AI theme, recognizing its multi-year runway.
Anticipate Shallow Corrections: Use dips as accumulation opportunities, not reasons for fear, understanding that "none of the corrections stick."
Diversify Thoughtfully: Recognize the "decorrelation" across asset classes; consider gold, silver and Bitcoin for portfolio resilience.
Develop Mental Models: Prioritize long-term planning (6-12 months out) over short-term news, aiming for consistent, incremental gains.
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, — The Proflex Team Trusted Macro Insights. Calm Investing. Tactical Trades.
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Frequently Asked Questions
The Fed targets 2% inflation measured by the PCE index. When CPI or PCE readings come in above target, the Fed may maintain or raise rates to cool the economy. Below-target readings give the Fed room to cut rates. Markets watch these releases closely because they signal the direction of monetary policy.
Oil prices are driven by supply-demand dynamics, OPEC+ production decisions, geopolitical tensions in producing regions, and global economic growth expectations. Rising oil prices increase input costs for businesses, pressure consumer spending, and can signal inflationary pressures that influence central bank policy.
Bitcoin's correlation with traditional markets varies by regime. During risk-on periods, Bitcoin often trades as a high-beta tech proxy. During liquidity-driven rallies, it benefits from excess monetary stimulus. In stress events, correlations can spike as leveraged positions unwind. Institutional adoption through ETFs has increasingly linked Bitcoin to traditional portfolio flows.
Earnings reports reveal actual business performance versus market expectations. Revenue growth, profit margins, and forward guidance drive stock re-ratings. Beats or misses relative to consensus estimates move individual stocks and can shift sector-wide sentiment. Earnings season also provides insight into broader economic health and consumer spending trends.
Options expiration (especially quarterly "triple witching") can create significant short-term volatility as dealers unwind hedging positions. Gamma exposure determines whether dealer hedging amplifies or dampens moves. Negative gamma environments can accelerate selloffs, while positive gamma tends to suppress volatility. Large open interest strikes often act as price magnets into expiry.
