In a traditional bear market, when there's an instant purchase of futures/spot, it's the bottom
This concept has also been shattered. I confirmed the bottom at the 7200 level, but today I witnessed that there's a basement below that.
I briefly mentioned it in a previous post, but I thought an adjustment would come, and if there was a good price, I thought I would buy in portions again, but...
Today was a day when I realized that our country's market is worse than I thought.
I feel that despair I felt in '21 again. A sense that some endless bottom is approaching me
At that time, I eventually cut all my secondary battery holdings at -40%.
And I vowed not to look back and put all my remaining money into S&P 500 and US Big Tech ETF.
The differences between '21 and now are
While the 2021 secondary battery market was run by only looking at the enormous profits to be made in the future, today's semiconductor market is one that is already making a lot of money. The point is that Korea already has a company that generates net profits as the world's number one.
In 2021, there was a typical pattern of a sharp decline from the right shoulder after a W-shape. The current pattern is the same. However, the depth of the decline is much deeper now. At that time, even if it fell, -5% was the maximum, but now it's -15%..... This is almost a figure we only saw when biotech failed Phase 3 trials.
The investment sentiment back then cooled slowly, but now it's in a state of rapid cooling. Even if it fell in 2021, there were sometimes cases where it was pushed up at the end of the market out of hope. However, this year it just lacks momentum. I often think it's enticing retail investors only to push them down. The market lacks follow-through strength at the end.
I think those who are holding without taking losses probably think like me. I think the current semiconductor market will eventually rebound. They're doing LTA supply contracts, and DRAM prices are visibly continuing to rise, but it's a picture that's logically hard to understand because profits aren't increasing.
In the current state, it has become a fait accompli that major US investment firms are reducing the proportion of semiconductors, which have risen relatively a lot, and shifting to undervalued M7. In conclusion, it means that for several months, it will be difficult to see the previous highs.
There were several rebound scenarios before, but in the current situation, semiconductors don't seem to budge until the Q2 earnings of the Big Tech M7 companies come out. For the first announcement, Tesla (22nd) is followed by Alphabet (Google) starting with the 23rd announcement, then Meta (29th) and Microsoft (30th).
The point is that at least for a rebound, we need to see all of this. Even after seeing all of this, if a rebound doesn't come immediately and there's any problem with these companies' CAPEX, strong downward pressure is expected.
Asian semiconductor short selling by major US investors is heading towards victory, and the only trigger for them to cover shorts is a change in position after M7's earnings announcement.
Today's KOSPI 6800 is essentially the last line of defense.
If it goes down further from here, we need to see KOSPI in the 5000s. We need to see lower levels to go up, and during these screams, no foreigners or institutions will extend a hand or show sympathy to retail investors when they fall.
As always, keep in mind that the market doesn't move as you think and doesn't easily give you what you want to earn, and I hope this current major bear market will be of great help to your investment style going forward.
Nevertheless, if I give you a hopeful story,
At the end of the market, foreigners bought up the 1 trillion won futures that institutions threw, and received about 600 billion won out of the 800 billion won that investment trusts threw in spot.
After all, the point is that foreigners also know that current prices are cheap. When foreigners don't like the price and think their portfolio has become overweighted, they continue to sell for rebalancing purposes like in July. They throw 300-500 billion won right at the market open and perform mechanical selling of 100-300 billion won per minute. They don't care whether the market goes down or not.
Nevertheless, the fact that they bought means they likely see a high possibility of a technical rebound in tomorrow's market.
However, if it falls again contrary to expectations, I think investor sentiment will collapse and it might be really the last line for retail investors.
** Additionally, JP Morgan released a report noting that banking semiconductor stocks will see improved performance in the second half.
As expected, the main underwriter released a good report backed by Hynix ADR listing, but Morgan Stanley released a report saying that sector rotation will turn away from tech stocks, so it seems the US market results today will likely impact the Korean market.
