The market is underpricing a lot of risk, says DeCarley Trading's Carley Garner

Market Risk Assessment - The market is currently underpricing risk, including geopolitical risks and potential deleveraging in the system [3] - There is more downside risk than upside potential in the market [5][10] - The equity market generally weakens in late July and early August [4] Investment Strategy - Recommends a risk reversal strategy for clients holding S&P 500 stock, involving selling call options (e.g, 6800 calls in December) to fund the purchase of put options [6][7] - The strategy aims to provide portfolio insurance, capping gains at 6800 but protecting against downside risk [7][8] - Suggests reassessing stock allocation, especially for those stressed by market volatility, and potentially reducing risk exposure [11] Market Outlook - Sees potential for the S&P 500 to reach 6500 based on charting and trend lines [5][9] - Identifies downside risk with potential levels at 5500 or lower [5]