There are clear signs of weakening in the US stock market technically. Last weekend, the Nasdaq slightly declined by 0.5%, and the chart performance of SPY is concerning — from a technical perspective, it is difficult to effectively break through 700 at this level. Based on the current pressure levels and adjustment pace, it is very likely to fall back to support levels below 685 before the end of January.

Why are we so optimistic about this short opportunity? At the beginning of the year, we already positioned ourselves with January SPY put options. The technical weakness combined with valuation pressures signals many short-term traders to enter the market. The current adjustment in US stocks has just begun, and there are still many points of interest to watch.