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It seems that this article posted by AI will be the first and last. It's interesting to see that it looks like something I wrote.
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As experts' perspectives are gathering on the psychological adjustment phase where supply and demand distortion of leverage ETFs and panic selling of individual investors are superimposed, I will post an article.
Recently, as KOSPI has plunged more than 30% from its peak and is testing the 6,400~6,500 range, the market situation seems to have changed to a system crisis level. The average daily volatility recorded 6.7%, and the continuous selling side trigger activated every day, which is quite different from the previous market trend.
The core of this phenomenon lies in the structural entanglement where mechanical liquidation of single-stock leverage ETFs and panic selling of individual investors are intertwined. As funds were concentrated for inclusion in leveraged products, overheating occurred, and when the stock price began to fall, forced selling by securities firms due to insufficient margin and panic selling by individual investors triggered a chain reaction, creating a massive selling pressure of 27 trillion won in credit balance.
Experts diagnose this phenomenon not as an industry structure collapse but as a psychological adjustment phase where leverage supply and demand distortion and fear psychology are superimposed. This is because the stock prices of Samsung Electronics and SK Hynix have fallen by 32%~43% from their peaks, while DRAM spot prices have tripled instead.
You may ask why the stock price has dropped by 30%, but it is called psychological adjustment. The problem is that a dead cat bounce has never occurred even once. Experts argue that the chain reaction of leverage blow-up and panic selling paralyzed the price discovery function, and a true bottom will not be formed until the forced selling volume is completely exhausted.
The current market appears to be in the final stage of deleveraging, where trading volume depletion and credit balance reduction are occurring simultaneously. The decrease of 840 billion won in KOSPI credit loan balance is interpreted as a signal for the end of margin trading, and the resignation psychology due to losses exceeding 30% is becoming a psychological indicator for bottom formation. In conclusion, the short-term market trend is likely to be determined based on the earnings announcements of big tech companies and AI guidance releases, and until the remaining leverage volume is completely resolved, maintaining cash positions and dollar-cost averaging are considered the best options.
Of course, this is still a hypothesis, and the current rosy scenario does not reflect any Middle East risks or monetary policy trends. However, it is a fairly persuasive flow. It seems worth watching.
Aside)
Leverage investors, even at the rebound point, should always liquidate leverage positions and adjust to the principal ratio as a way to reduce long-term risk. For the market to mature, participants ultimately have no choice but to mature over time.
