An analyst has upgraded the Direxion Daily S&P 500 Bear 3X Shares ETF (SPXS) to a 'Buy' rating, positioning it for potential near-term S&P 500 corrections despite the index's current all-time highs and SPXS's significant year-to-date decline. This tactical upgrade, driven by anticipated catalysts for a market pullback, acknowledges SPXS's unsuitability as a long-term holding and highlights key risks including continued market valuation expansion and beta slippage, with the analyst's conviction being moderate.
An analyst has upgraded the Direxion Daily S&P 500 Bear 3X Shares ETF (SPXS) to a "Buy," framing it as a tactical tool for downside protection while the S&P 500 is at all-time highs. The report emphasizes that SPXS is fundamentally a poor long-term holding, a typical trait of leveraged inverse ETFs susceptible to value erosion from beta slippage. This upgrade is notable given the ETF's significant year-to-date decline, which followed a surge during the April 2025 market correction. The analyst's rationale hinges on potential, though unspecified, catalysts for a market pullback. However, this recommendation is qualified by a stated conviction level that is lower than in H2 2024, acknowledging the primary risks of continued expansion in market valuation and corporate earnings, which would be detrimental to an SPXS position.
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