SQQQ – Discussion around Short ETFs

I haven't participated in shorting anything in the market because we've been on a bull run since I tossed my first dollar into the market about 4-5 years ago.

I think that might change (and you're entitled to your opinion as well). One thing we can certainly agree on is that the overall market sentiment is different now, there's a lot more fear now than there has been since I've invested (besides the initial covid dump) with countries on the brink of war, the supply chain issues persisting, semiconductor shortages effecting every technological facet of our lives, and of course the looming rate hikes over the entire market/economy – I've lost a lot of my confidence in the market for these reasons.

I'm looking into some short plays and for the sake of this discussion I'll stick to talking about SQQQ. I noticed that prior to March 2019 SQQQ was consistently dropping until the covid fear kicked in. The -3x leveraged ETF shot up from $240 to $1,111 in a single day – INSANE!

However, fast-forward to today and it sits at a measly $41, the lowest it's been. Why is that? Sure it had a good day today (up nearly 10%) but that's just a few bucks, still far off the mark of what it was right before covid.

What's keeping it from shooting up into the hundreds again? Is the overall market really betting that the near-term future of tech companies looks better at this moment than it did just before covid?


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