Public trading strategy

Goldman warns of a $165B stock selloff — bet against the market's hidden leverag

Thesis

When traders borrow too much money to buy stocks, the market becomes fragile. If prices start to drop even slightly, these borrowed positions are forcibly closed, causing a cascading crash. Goldman's warning suggests the market is dangerously overleveraged, making a short bet against the broad market a smart hedge.

Strategy approach

Build a mean-reversion short strategy on SPY (S&P 500 ETF) on the daily timeframe. Enter a short position if the price breaks 2% below its 20-day moving average on high volume. Cover the short after a 3% gain or exit after 10 trading days.

Markets and timeframes

SPY1D

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