The market’s sentiment is becoming increasingly one-sided: bearish.

For short-term traders, this is actually a very dangerous signal.

High U.S. Treasury yields, rising oil prices, inflationary pressure, and expectations of Fed rate hikes—everyone can see these bearish factors. When retail investors, the media, and traders all start waiting for a “major crash” at the same time, shorts themselves can become the most concentrated source of liquidity in the market.

The market may continue to fall, but the path will not be so straightforward.

As long as one data point is not as bad as expected, U.S. Treasury yields suddenly retreat, or an index slightly breaks through a key resistance level, it could trigger short covering.

Short covering → index rises → more short positions hit stop-losses → further gains.

What ultimately forms is not a sudden improvement in fundamentals, but a short squeeze.

So the biggest risk right now is not getting the direction wrong.

It is getting the direction right but dying on the timing.

The macro outlook can remain bearish.
But in the short term, you cannot blindly chase shorts when everyone is bearish.

The most comfortable short entries often appear when the market starts believing in a rise again.$NVDA

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