Looking for anyone to convince me I'm wrong because I might be missing some info/have the wrong perspective.
I'm not heavily invested right now, but still want a hedge for the positions I do have. I am generally bearish about the next few months, but I think there will be days like yesterday that will absolutely wreck shorts. I am trying to determine what the best hedge would be given the macroeconomic environment.
My thesis is basically this:
Markets will generally trend down over the next several months, but will pop on news. The most likely "news" events to occur are deals with countries that are pseudo-vassals to the US. Japan, Taiwan, South Korea are the most obvious and at least Japan and SK are already supposedly in talks with trump admin. When these deals occur we will probably see a gap up, especially in stocks exposed to those countries.
I think china is unlikely to come to the table soon, but Im not a economics/geopolitics expert by any means. My intuition is just that China will go down swinging. That said it does seem like China is in a weaker position than the US here. I do think that even if China is willing to talk now, trump is unlikely to make a deal. I think trump wants to make deals with essentially all other nations first, and wants to isolate China from global trade. At this point trump will have maximum leverage, and will seek a deal. This probably won't be for at least several months.
For these reasons, I feel like shorting any stocks that rely on China trade, and especially Chinese stocks themselves is potentially the best hedge here. Stocks like PDD that are both Chinese and benefit from massive exporta seem to be the best option
Anyone have any thoughts?