Market Without Leading Stocks, Short-Term Trading Difficult

The current market is experiencing such rapid rotation that even trading experts find it difficult to make profits. Analysis suggests that even if a short-term rebound appears in a specific stock or sector, it is difficult to gauge its sustainability. Therefore, it is assessed as a market phase where profit targets should be set very low.

The current domestic stock market index is strongly influenced by specific large semiconductor companies like Samsung Electronics and SK Hynix. Therefore, investors heavily weighted in these stocks might not perceive the market as expensive. However, as stock price appeal and disappointments coexist across individual stocks, it is more crucial to understand the trends of individual sectors rather than the overall index fluctuations.

Many traditional analyses suggest that the current market remains in an undervalued territory. This is because the market is gradually adapting even with high oil prices reaching $105 and bond yields at 5%. Particularly, with the advent of the artificial intelligence (AI) era, there is a need to re-establish past stock valuation criteria.

Analysis indicates that in the history of the Korean stock market, it is rare for a previous leading stock to become a leading stock again. This suggests a low probability of semiconductors, which were past leading stocks, dominating the market again. However, there is a possibility that sub-sectors such as semiconductor materials, parts, and equipment (SooBuJang) could exert leadership.

For a sector to become a market leader, a period of energy condensation, or accumulation, is essential. Currently, it is perceived as a time when various stocks are observing each other, preparing for a concentrated trend. Experts forecast that at least 2 to 3 months will be needed, and they analyze that this is a phase of testing the waters for the leading stock position.

Leading stocks typically maintain their strength for about 1 to 1.5 years. It is pointed out that for Samsung Electronics and SK Hynix to become leading stocks again, it is essential for them to surpass their previous highs. Considering the current performance and global competitiveness of semiconductor companies, there is sufficient upside potential, but the current stagnation is seen as a result of tangled supply and demand. This period can be understood as a process of seeking new leading stocks within the limits of leading stock lifespans and rotation structures.

Long-term investors expect the market to eventually trend upwards, but a maximum drawdown (MDD) of about 50% from the peak frequently occurs during that process. As seen in the case of HD Hyundai Electric, even if it has risen tremendously in the long run, instantaneous MDDs often reached 50%. It must be recognized that if this volatility cannot be endured, the entire plan for long-term investment may become meaningless.

Amid the recent acceleration of AI model release cycles, the argument that some AI companies discussing development pace adjustments can be interpreted from a conspiratorial perspective has emerged. Analysis suggests that leading companies have now entered the phase of generating profits and building market entry barriers under the pretext of regulation. In the face of competition from rivals like China, overall market stagnation is impossible, and leading companies are believed to be aiming to make money or block late entrants, having judged that they have reached a frontier model.

Considering the current macro environment, the stock market could fall another 3-4%, but the domestic market is showing relatively strong support. Despite foreign selling, it is demonstrating strong defense against declines, and the current downward trend is interpreted as part of a supply and demand reversal process. Therefore, a prolonged sluggish trend is more likely than a collapse.

Among stock market proverbs, 'Bbaedakkomri,' meaning 'removed and then tied,' was mentioned. This concept, cited by André Kostolany, refers to resolving market anxiety and devising response strategies by treating uncertainty as a given. The domestic stock market also shows signs of responding to macro environmental uncertainties, such as interest rate hikes, with this psychology.

A skeptical view was raised regarding the resolution of uncertainty after the holiday. Analysis suggests that an immediate rise is difficult to expect as the macro environment still weighs on the market. Therefore, it is better to respond by focusing on individual stocks rather than the overall index trend.

While semiconductors were the industry bottleneck in the first half of this year, power is expected to become a full-fledged bottleneck starting next year. Accordingly, attention should be paid to power infrastructure-related stocks such as nuclear power, ESS (Energy Storage Systems), and cables. However, caution is advised for investment as the current trend for power-related stocks is not favorable.

In the current market, thematic surges rarely last more than two days. Therefore, if a specific stock surges again tomorrow, a phased selling strategy to reduce holdings is suggested as effective. As the macro environment still weighs on the market, stable inflow of supply and demand can only be expected once the macroeconomic situation stabilizes.

When the market is good, it's not difficult to cope, but when it's bad, a time will surely come when you have to forcibly sell holdings against your will. A warning was issued that market trends similar to late July this year could recur. Investors must preemptively establish response strategies according to the market atmosphere.

Analysis suggests that studying individual stocks does not directly translate into profit in the current market. Previously, stock analysis and issue sharing were active, but now, conversations have drastically decreased. Ultimately, from a broader perspective, the aftermath of the July crash continues, so understanding market supply and demand trends is more crucial than studying individual stocks.

It is assessed that the market is currently digesting only 30% of its 'fertilizer' (nourishment). Here, 'fertilizer' refers to the losses of buying entities, which are being digested through methods like share buybacks, but the situation after completion is key. For market uncertainty to resolve and show stable trends, more time is needed for the volatility index to fall to the 30s.