The key issue for the South Korean stock market right now isn’t whether there’s a rebound. It’s whether the market can truly stabilize after deleveraging. In the previous round of declines, many people only focused on falling stock prices. But fundamentally, it was more like a leverage-driven stampede. Leverage ETFs, hedge funds, margin accounts, and retail investor confidence—these factors stacked together amplified the volatility. The most intense phase may already be over. Leverage ETFs have mostly been cleared out; Hedge funds have been deleveraging; Regulators are cracking down on new leverage; New leverage is being significantly suppressed. But this doesn’t mean the South Korean market has fully stabilized. The real “last mile” hasn’t been completed yet. Margin balances are still relatively high; Some ETF shares and positions still need gradual digestion; Foreign capital hasn’t returned strategically; Retail investor confidence has taken a clear hit. So I’m more inclined to view the current South Korean market as: Transitioning from the “forced selling phase” to the “waiting for validation phase.” Next, there are three key things to watch: First, no more macro shocks. If there’s no new hawkish impact from the Fed in August and no escalation in geopolitical risks, the market might get some breathing room. Second, AI CapEx needs to keep proving itself. If giants like Meta, Microsoft, and Amazon continue investing in computing power and data centers, then the fundamentals for storage, HBM, and semiconductors remain intact. Third, retail and foreign investor confidence needs to recover. The market can’t be fixed with just a technical rebound—it needs capital, positioning, and sentiment to align for true stabilization. The most optimistic scenario: initial stabilization starts from late August to early September. Baseline scenario: liquidity-driven pricing transitions back to fundamentals-driven pricing in mid-to-late September. Pessimistic scenario: if retail investors keep pulling out and institutions keep avoiding the market, recovery might drag into Q4. So don’t rush to conclusions based on one rebound candlestick. The end of deleveraging only means the most dangerous phase of forced liquidations might be over. Whether the market can truly recover depends on whether the fundamentals are reaffirmed. The South Korean stock market isn’t without opportunities right now, but it’s not yet time for blind optimism. First, see if capital flows back in, then check if the storage and AI hardware themes continue to hold up.