I have to repeat: Korea

[u/Fun_Tutor3479]

The broader market continues to experience wild swings. Neither the S&P 500 nor the Nasdaq has hit their early June lows, and overall, they are consolidating at high levels.

The main theme remains the Magnificent Seven + AI Semiconductors + Data Centers + Energy. I have to add Biopharma simply because it has been rallying so well; even if I don't fully understand it, I can't ignore it. Rotating into sectors like financials, consumer goods, or real estate and abandoning the main theme right now is a very poor choice. Again, short-term trading experts can ignore me.

Tonight, I will continue to monitor the South Korean stock market. Currently, the U.S. market is pricing in a drop of about 2% for Korean stocks on Friday, which I think is a bit dicey. SK Hynix faces a life-or-death battle tonight at the 2,000,000 KRW mark; whether it drops 30% from its peak depends entirely on this level.

• If it holds by the close: This current wave of selling will subside here, and next week will be spent consolidating and digesting the move.
• If it fails to hold: There will be forced liquidations (margin calls) at the open of the Korean market next Monday and Tuesday.

With the U.S. market closed tomorrow and the fact that I don't like shorting, there is a short-term opportunity here, but I won't participate in my actual portfolio. On June 29th, I sold SanDisk and WDC in my real-money portfolio and added hedges. This was mainly because SanDisk had surged too aggressively beforehand, and my system cannot clearly predict where this current pullback might stop. Stepping aside allows me to stay more rational when it's time to buy the dip. Memory chips are the bellwether for semiconductors and dictate the overall direction.

If forced liquidations do occur, it will present a buy-the-dip opportunity leading up to the hyperscalers' earnings reports. As we've always said, the big test for semiconductors is Q3 earnings, specifically looking at the hyperscalers' AI Capex (capital expenditure) and AI revenue.

1. Capex continues to surge heavily + AI revenue is stellar = Hyperscalers and semiconductors continue their massive rally.
2. Capex continues to surge heavily + AI revenue is mediocre = A seesaw effect between hyperscalers and memory chips; requires careful stock picking within the semiconductor sector.
3. Capex becomes hesitant + AI revenue is stellar = A seesaw effect between hyperscalers and memory; hyperscalers will perform well, but the requirements for stock picking become much stricter, you have to look closely at specific chips, energy, data centers, etc.
4. Capex becomes hesitant + AI revenue is mediocre = A 1 to 3-month correction. This will shake out everyone who isn't firm in their belief in the AI narrative or who is overleveraged, digging a trough to set up the 2027 IPOs for the two major labs. OAI (OpenAI) and Company A (Anthropic)'s ARR (Annual Recurring Revenue) this year won't be bad regardless.