Risk Is High

Risk is now high in the market. For the past month the negative sentiment has buoyed the market and buffeted declines. But sentiment has now turned positive, which means the market no longer has a buffer on the downside. Sentiment is not extreme so the market can keep going higher but a big move lower is no longer out of the question either. It is difficult to call a change in momentum especially in the market of the past couple of years, but there is a few percent of possible upside and a lot more potential downside.

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