What is the True Risk/Reward Equation in the Markets Today???
Is the potential upside reward really larger than the downside risk right now?
The narrative on Wall Street has changed dramatically once again this year. This is understandable after the strong rally, but given the realistic view of economic and earnings growth over the next 12-18 months, the risk/reward equation up at these levels is a tricky one. Therefore, investors are going to have to remain very nimble this summer.
In the currency market, the USDJPY cross is turning lower once again. It has broken back below two important long-term trend-lines already. So, if it breaks its “line-in-the sand” support level in the coming weeks or months, it’s going to be quite negative on several different fronts.
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