Hey folks, I wanted to take a second to remind everyone of the reward-to-risk we see in the equity market.
Looking at a basic chart of the S&P 500, you’ll quickly notice that it hasn’t done anything in two years. And it’s remained flat since February of this year.
In fact, I wouldn’t be surprised if the S&P 500 is trading even lower by the time you read this.
But why is this important? Because it has to do with the reward-to-risk potential for investors trading on the long side.
And given where interest rates are right now, things are not looking good for the bulls…
In today’s 3-minute video, I explain what happens to the equity market when rates are higher, why the reward-to-risk ratio is getting worse and why investors should shy from being bullish for the time being.
— Serge Berger
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Source: Investors Alley