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The economy as measured by GDP and unemployment was doing really well up until 2020 and Covid. And stock prices represent the present value of future earnings - if you believe that we'll see a reversion to the mean after Covid (and we will), why would you expect SPX to tank?

In my understanding professional short sellers rarely short the whole market. They'll tend to have a particular firm that they think is overvalued and short that.

At least as of a couple of months ago, the lion's share of growth in the S&P 500 was from a few tech stocks, everyone else seemed mostly stagnant. You might respond that stagnant seems to be an overvalue, and I'd agree except that the fed has been pumping money into the markets in huge amounts.