Why the market rally may be unsustainable

Market Sentiment & Risk Assessment - Market sentiment indicates widespread complacency among retail investors, mirroring pre-April market downturn behavior [2] - Technical analysis of NASDAQ and S&P charts reveals proximity to significant trend lines and overbought conditions based on the Relative Strength Index (RSI) [3] - RSI divergence on monthly and weekly charts suggests an unhealthy and unsustainable rally, warranting risk reassessment [3][4] - The industry advises clients to reassess risk and consider alternative strategies if they experienced discomfort during the April market downturn [4][5] Hedging Strategies - The industry suggests shifting from risk assets to safer assets or employing hedging strategies using options and futures markets [5] - Risk reversals, involving selling call options to fund the purchase of put options, are presented as a hedging technique to protect portfolios against potential downturns [6] - The industry recommends seeking professional advice before implementing complex hedging strategies [6]