Due to the impact of U.S. President Trump's tariffs and the continuous appreciation of the TWD, foreign investors have been increasing short positions last week, reaching a net short position of 47,000 contracts. Financial writer Tsei Hsiang pointed out that historical data shows a 70% probability of a decline in the Taiwanese stock market following a surge in foreign short positions.

Tsei Hsiang mentioned that many investors interpret the increase of foreign short positions above 40,000 contracts as a significant warning, as they equate this level with a potential downturn in the stock market.

However, some investors argue that the increase in foreign short positions is merely a hedge against the cash market, thus making its reference value less significant. Tsei Hsiang noted that historical records of the highest days for foreign futures net short positions show a 70% probability of a decline in the Taiwanese stock market the following day, with an average drop of 2.33%.

In summary, historical experience indicates that a significant increase in foreign short positions raises the likelihood of a decline in the Taiwanese stock market. Tsei Hsiang emphasized that not only do foreigners tend to short sell in pressure zones, but they also deliberately depress indices through key stocks, making it challenging for them to incur losses. Understanding the market changes during and after heightened foreign short positions will allow investors to strategize effectively, especially amid rising trade tensions under Trump's administration, enhancing the difficulty of market operations and the importance of tracking macroeconomic trends.