Why You Should Revisit the Leading Stock Strategy Now

SamproTV will launch a subscription service next week. This offers a new approach to the leading stock strategy in current market conditions, which are difficult to navigate with existing investment methods.

CEO Lee Ji-hwan aims to help investors effectively respond to the changing market through a service that incorporates his insights.

The amount is not significant enough to indicate a trend reversal.

Therefore, there is no need to attach excessive importance to today's supply and demand situation, and it is unlikely to signal a fundamental shift in market trends.

The US market uses a 5-day average for settlement calculations for futures and options. Therefore, where Friday's closing price—the settlement basis—is positioned hints at the future direction of the market.

If the closing price is pushed down, the market is likely to show a downward trend. Conversely, if the closing price is pushed up, it is likely to continue an upward trend.

The key is whether leading stocks like semiconductors are pushed up to the Friday closing price. This allows for predicting the market trend for the following week.

"Looking at where the previous Friday's closing price is placed can reveal a lot. If they intend to push it downwards, they will start by lowering the closing price," said CEO Lee Ji-hwan.

The US Treasury's short-term bond buyback policy aims to stabilize 10-year Treasury yields. However, it disappointed the market by being executed at a scale of $6 billion, falling short of market expectations of $8 billion to $10 billion.

Even though the Treasury announced it would use its TGA account, analysis suggests that its expressed commitment was insufficient.

CEO Lee Ji-hwan pointed out, "Ultimately, it's expressed as disappointment with the execution amount... If they had already decided to use the TGA account, why not aim for around $10 billion?"

The US Treasury's short-term bond buyback has a short-term liquidity injection effect, similar to interest rate cuts and quantitative easing. The problem is the mismatch between the Fed's interest rate hike stance and the Treasury's liquidity provision policy.

CEO Lee Ji-hwan explained, "It feels like they're doing interest rate cuts and quantitative easing simultaneously. That's what initially caused some opposition in the US market, and that led to Kevin's (Fed Chair) remarks at the Jackson Hole meeting, essentially saying, 'I'm trying to raise interest rates, and you're talking about interest rate cuts or quantitative easing?'"

The market perceives this as simultaneously pursuing quantitative easing and interest rate hikes, leading to confusion.

A 10-year Treasury yield of 5% or a KRW/USD exchange rate breaking 1500 does not necessarily lead to an economic downturn. These are merely typical psychological resistance levels based on past data.

CEO Lee Ji-hwan said, "The idea that the 10-year Treasury yield shouldn't exceed 5% or the exchange rate shouldn't exceed 1500 won is typically based on our analysis of past data. But if it crosses those points, does it really cause any economic change? That's not the case." He believes the fear from past crises like the IMF or financial crisis is reflected in market psychology.

Due to the impact of the COVID-19 pandemic, interest rate policies are showing different patterns compared to the past.

CEO Lee Ji-hwan emphasized, "Personally, I don't see it as that pessimistic. One of the most confident reasons is that the current stock market and interest rate cycles are not aligned with the economy, so I believe it won't be."

A rise in long-term interest rates does not automatically imply an economic recession; specific circumstances are acting as structural factors amplifying market volatility.

Even if there are negative factors like oil prices or interest rates, if the market doesn't fall, it should be considered a rise. The market doesn't always act rationally.

CEO Lee Ji-hwan stated, "One of the things I failed at for a long time was that the more I researched, I thought, 'Oil prices are like this, so the stock market should fall this much.' Nowadays, if it doesn't fall, it's just going up. Thinking that way is actually much more comfortable and rational."

Despite three unstable macroeconomic factors, semiconductor stocks not faltering is evidence that the market's strength is alive.

If semiconductor stocks fall more significantly than the market, it reflects negative factors heavily. However, if the US stock market falls less and semiconductor stocks rise independently, the market's power could work in the opposite direction.

This phenomenon occurs in the gap between fundamentals and psychological momentum.

CEO Lee Ji-hwan said, "The AI momentum has driven the current semiconductor rally. If it falls more significantly than the market, it's heavily reflecting negative factors from below. If not, and the US stock market falls less, and semiconductor stocks rise independently, then the market's strength could be the opposite."

An accumulation zone occurs when a divergence phenomenon appears. This is the point when the price forms a low, then drops once more, forming a lower low.

CEO Lee Ji-hwan explained, "Divergence means forming a low once, then dropping again, and the period when it drops lower than the previous low is the accumulation zone." It appears in two forms: V-shaped rebound and staircase ascent, depending on how supply is absorbed.

Consistent long-term accumulation of volume can lead to a solid ascent. A sharp rise driven by short-term momentum is likely to quickly reverse.

Looking at Samsung Electronics' case, after a low in November, it underwent a six-month period of consolidation, allowing for sufficient accumulation, which contributed to securing upward momentum. CEO Lee Ji-hwan added, "If long-term volume is consistently accumulated for even one or two months, as it is now, it can rise more steadily than expected."

Stocks with high investor loyalty can lead to longer periods of consolidation as investors don't sell. This appears either as a divergence, severely pushing down the price again, or through tedious periods of consolidation to absorb supply.

CEO Lee Ji-hwan said, "So, if supply isn't released, as I mentioned earlier, it either severely pushes down the price again in the form of a divergence, or it induces a tedious period of consolidation for six months, a year, or two years to wear out investors and absorb the supply."

In the case of secondary battery stocks, despite lower lows, selling did not occur, making it difficult to form a bottom.

For individual investors, a bottom-up approach is more realistic than a top-down one. First, identify stock patterns, then check foreign institutional supply and underlying content, and finally verify through valuation.

CEO Lee Ji-hwan advised, "Finding stocks first, then looking at foreign institutional supply, content, and valuation, and then macro factors—that's usually the best method for oneself."

After discovering successful patterns, filtering by supply, short interest, performance, and momentum is an effective strategy.

This service presents a rational top-down investment approach.

It will provide subtle market patterns and leading stock analysis methods that are difficult for the general public to access.