Proflex Weekly Update — Week 14

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.
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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: ​
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1) Trump's April 6 ultimatum for Iran to reopen the Strait of Hormuz expired this morning with Tehran formally rejecting it.
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​2) Brent is holding its ground And March CPI — the first inflation reading to capture the full oil surge — drops Thursday.
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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. ​
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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.
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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.
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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.
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​You can watch the complete recording here:

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Key Drivers This Week

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.
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The 200-day moving average sits at ~6,641–6,687 — the index closed April 2 at 6,582.69, below it.
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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. ​
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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: ​
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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.
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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.

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.
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February CPI came in at +2.4% YoY with core at +2.5%. That was the last clean pre-war reading. ​
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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:​
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1) JPMorgan now forecasts zero rate cuts in 2026; Goldman still models two (June + September).
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2) Fed Governor Logan remains hawkish on inflation; Governor Bowman is watching February's 92,000 job losses and arguing for three cuts.
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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.

The Earnings Counter-Narrative: Tech Got Cheaper

While the war dominates headlines, a structural counter-narrative is quietly building.
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​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%.
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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.
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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.
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​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:
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Goldman Sachs (April 13)
JPMorgan, Citi
Wells Fargo (April 14)
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These will be the first signals on whether investment banking activity and credit quality have held up beneath the war noise.
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​Tesla will be one of the most important earnings to watch as it reports April 22 with analysts expecting +60% YoY EPS growth.

Bitcoin & Gold: Same Safe Haven Category, Different Signal

Bitcoin is consolidating in the $65,000–$70,000 zone.
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​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.
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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.

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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.
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China has purchased gold for 16 consecutive months, building reserves to 2,309 tonnes — now 10% of its total FX reserves.
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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.

🔍 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
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• Oman corridor transit volumes — the real Hormuz signal; each additional vessel is a data point toward logistics resolution
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• Iran's escalation posture — April 6 deadline rejected; ground invasion risk into Monday's market open
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• S&P 500 weekly close vs 6,660 — above changes the medium-term setup; below keeps the range intact
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• Bank earnings (April 13–15) — Goldman, JPMorgan, Citi, BofA; investment banking pipeline = economy health check
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• MicroStrategy BTC announcement — Saylor's "Back to Work" signal; watch for confirmed purchase

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🧭 Proflex Playbook – Discipline Over Direction
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​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.
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Our conviction stays anchored in the data:

• Focus on Structural Growth: Continue to overweight the secular AI theme, recognizing its multi-year runway.
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• Anticipate Shallow Corrections: Use dips as accumulation opportunities, not reasons for fear, understanding that "none of the corrections stick."
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• Diversify Thoughtfully: Recognize the "decorrelation" across asset classes; consider gold, silver and Bitcoin for portfolio resilience.
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• Develop Mental Models: Prioritize long-term planning (6-12 months out) over short-term news, aiming for consistent, incremental gains.

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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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