I am currently bearish on the US stock market, but I find it hard to short SPY directly.
Behind the index level are global liquidity and policy games; betting on direction is not as effective as betting on structure.
From a macro perspective, truly cost-effective shorts often appear where the price rises the most and the consensus is the strongest.
For instance, EWY has increased by 137% from last April to now, clearly outpacing the fundamentals.
In such a position, even without a sharp drop, the pullback itself is enough to consume a portion.
Behind the index level are global liquidity and policy games; betting on direction is not as effective as betting on structure.
From a macro perspective, truly cost-effective shorts often appear where the price rises the most and the consensus is the strongest.
For instance, EWY has increased by 137% from last April to now, clearly outpacing the fundamentals.
In such a position, even without a sharp drop, the pullback itself is enough to consume a portion.