Market Analysis: High Volatility and Risk Management Advice

In a highly volatile market, it's crucial to increase cash holdings to reduce risks and avoid losses for investors.

### Market Analysis: High Volatility Caution and Risk Management Strategies
* 📉 The Nasdaq dropped **2.3%** yesterday, with the S&P 500, QQQ, and semiconductor sector showing **similar patterns**, indicating **high market volatility**.
* 📊 "Movements of **10% in a day** indicate that the **risk has increased**."
* 💰 In volatile markets, it's advised to **increase cash holdings** instead of making **risky bets**.
* 📈 When considering shorting the market, it's recommended to **wait for about 2 to 3 days after a turning point** to avoid potential short squeezes.
* 🧠 "The market moves in a direction where **increasing anxiety leads to losses**."
* 📉 The current market is in a correction phase, not a bull market, so **caution is advised when interpreting short-term rebounds**.
* 💡 "The safest time to invest is when everyone, or most people, psychologically agrees that it has become **cheap enough to start rising now**."
* 📉 "For those who are looking to make quick profits, it means you should **sell**, and for those who are long-term investors, it means you should **wait until this kind of period comes**."

This is a technical analysis. Let's take a look at the market situation. For example, in the case of Nasdaq, it dropped by 2.3% yesterday, reversing the upward trend from the day before and moving back downward. The S&P 500, QQQ, and especially the semiconductor sector showed a similar pattern. The volatility itself is very high. Movements of 10% in a day indicate that the risk has increased. As I have emphasized before, when volatility is high, it means that the risk has increased. Some may see high volatility as an opportunity, but in my case, I perceive the situation where fluctuations are increasing as a higher risk. When the risk increases, what should you do? Instead of betting, you should increase your cash holdings.

It is about the movements. Those who moved according to these movements can continue to hold cash and wait. Even if the fluctuations were large, those who entered the bet suffered significant losses. Even if they say this is a rebound and decide to jump in, since they experienced a 20% drop yesterday, their average price worsens. As previously emphasized, following this trend will likely lead to higher losses. So, we need to learn from here. Even if we incur losses, it is meaningful to learn. I think this market is providing us with many lessons. Let me give you an example. I have explained various points. First, I mentioned that you need to look at the trading volume.

In a previous video, I emphasized the flow, meaning that if the selling volume surges, the selling trend could strengthen. I also mentioned the importance of maintaining a short-term trend when a strong selling volume emerges on that day. However, the short-term trend has collapsed. So, if we decide to short, when betting on the downside, we should enter at the turning point. We need to wait for about 2 to 3 days from the turning point to enter. Why should we do this? It's because a short squeeze could occur. When there is an excessive amount of shorts, liquidation of short positions often leads to a rebound. However, such liquidation rebounds tend to occur quickly when the downside pressure is strong. Therefore, being deceived by this, it is called a buying timing.

When you go in, there is a possibility that you will incur losses again. The key trends we could see in this market are as follows. When the two major sell volumes I mentioned earlier increase significantly, we need to be cautious. And when the trend is broken, we need to be careful. This market is clearly showing us these things. Next, let's look at the recent movements. The downward trend has been strengthening continuously, and in this situation, there was a rebound. To decide whether to view this as a buying opportunity or as a short squeeze, you need to observe for at least about three days. In order to establish a support line, this short-term trend has recovered, so I mentioned how this short-term trend direction will be. I said that a changing trend needs to emerge. However, if you enter into buying based on just one day's movement, then again

Physics can be subject to the flow, so when we think about it psychologically, those who entered the market at the rebound timing, after continuously falling, were pushed down again by a drop of nearly 20% yesterday. Those who entered at this point must have a strong psychological state, right? Their mindset for exiting will be very strong. The anxiety level will be extremely high. They will be thinking, What should I do with the stocks I bought? Did I enter for no reason? From today, the market is not going to recover right away. The more such anxious psychology exists, the less reason the market has to rise. Because ultimately, this anxiety is likely to pour out as selling pressure. Therefore, the market will dump even the stocks with this anxiety.

A reversal is expected due to the rise. That's why there is no immediate reason to recover the buying volume that entered at this time, as it was left behind by yesterday's situation. It is likely that a reversal will occur after withdrawing some volume from the downside. This is a matter of psychology. On the other hand, to explain why it is difficult to shoot, it's because the downward trend was strong, so I went short. Ultimately, what happened was a close to 20% turnaround. So, from the perspective of those who went short, there is a high possibility that they cannot withstand the anxiety at this point. Therefore, they may sell here and regret it when they see it dropping again yesterday. This is where this psychological understanding clashes. Oh, in this situation where it dropped again, going short, and conversely, those who bought at this time are now left behind. So, among these psychological aspects,

The market moves in a direction where increasing anxiety leads to losses. If you understand this concept, ultimately, you can understand that our contrarian investment moves with this direction and characteristic. Therefore, if you ask what will happen to the market in the future, the volume that entered here was absorbed in just one day, so short-term anxiety will be greater. Because those who went short immediately saw significant profits yesterday, there is no reason to fall into anxiety. This is because the trend that surprised them came just two days ago, so the likelihood of it happening again has decreased significantly. Therefore, the market itself is likely to draw more downward in the short term, and those who entered during this short-term rebound phase will sell again.

It is said that the possibility of a turnaround towards an increase is high around this time. So why am I telling you this? Ultimately, we should not always invest. We cannot always invest. You cannot continue to invest in everything every day. The safest time to invest is when everyone, or most people, psychologically agrees that it has become cheap enough to start rising now, and the psychology of selling now is that it is cheap. When that sentiment dominates the market, that's when the trend of rising begins. So, until that time comes, you should wait a bit and maintain a high cash position, observing. This is the way to reduce risks. In a situation where the sentiment is like now, and I myself am not sure where to invest, there is no reason to start with precious cash in falling assets.

It would be helpful if you understand that there is no prediction. Semiconductor itself is in such a situation right now, so I mentioned not to make predictions like the video I shot three days ago. We shouldn't try to predict but should respond. The current market is in a correction phase, not in a rising phase, it's a bear market. So, just because there was a rebound from a bear market, it doesn't immediately turn into a bull market. It takes time for a shift from bear to bull market, and vice versa. So, there are buying opportunities in this range of flow. However, trying to time the market continuously while this is happening can actually raise the average purchase price. Therefore, I emphasize to be careful about those aspects. Even when looking at individual stocks, like NVIDIA, they are heading down again.

A trend is emerging in the drawings, and in the case of Tesla, the short-term trend is breaking through again. Ultimately, I think the possibility of revisiting the downside low has increased. Therefore, I advised not to buy in this range. For those who are looking to make quick profits, it means you should sell, and for those who are long-term investors, it means you should wait until this kind of period comes. Instead of buying hastily, since the overall market is bearish, it's better to hold cash and watch the trend. It's important to secure as much cash as possible to capture the timing when the market weakens and changes direction. This is a crucial time. Even VIX is currently surging strongly.

Given that the market is currently in an upward trend, we always mention that we are at a higher risk in this situation. Risk here refers to volatility itself rather than the likelihood of falling. As volatility increases, so does the risk. For instance, when an index fluctuates by 10% in a day, and companies worth trillions of won are dropping hundreds of billions in a day, this indicates a market with high volatility, not a normal one. The fact that the market direction keeps changing from up to down, up again, down, and so on, shows that it is not a normal market. Therefore, in such times, it is important to be cautious of the risks. I always emphasize not to be swayed by short-term fluctuations, whether the market goes up or down in a day. Instead, it is crucial to invest with principles in mind and consider reducing risks.

Even if the market is down, I believe that we can continue to invest without any significant setbacks or pain. In fact, if you see through my membership, the portfolio I invest in is not experiencing losses. Instead, it continues to show gains. We invest in a way to avoid risks, so I think you can consider that these aspects are possible. First and foremost, it is important not to lose assets, especially in a volatile market like the current one. By understanding this, I will continue to provide insights on avoiding risks to ensure that our subscribers do not suffer losses. I believe that there is plenty to gain if you utilize the insights. I will end today's video here. Thank you.

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기술적분석

Market Analysis: High Volatility and Increased Risk

3%, along with the S&P 500, QQQ, and the semiconductor sector, indicating high volatility and increased risk.

In this situation, it's advisable to increase cash holdings instead of betting, as following the trend could lead to significant losses.

The analysis also emphasizes the importance of looking at trading volume and waiting for a turning point before entering a short position to avoid being deceived by a short squeeze.

Interpreting Market Trends and Psychological Impact

The market is showing significant increases in sell volumes, indicating a need for caution.

A strong downward trend has been interrupted by a rebound, creating a dilemma between buying and short selling.

The psychological impact of market anxiety is high, leading to a potential increase in selling pressure and a projected reversal in the market.

Understanding Market Trends and Contrarian Investment

Increasing anxiety in the market leads to losses, while a contrarian investment moves in the opposite direction.

The recent absorption of market volume in a short time has heightened short-term anxiety, leading to a likely further downward trend.

The safest time to invest is when the market psychology agrees it's cheap enough to rise, reducing the risk.

The Semiconductor Market and Current Trends

The semiconductor market is currently in a correction phase, not a rising phase, indicating a bear market.

Trying to predict market shifts can lead to higher average purchase prices and it's advised to be cautious.

Stocks like NVIDIA and Tesla are showing downward trends, suggesting a higher possibility of revisiting the downside low, so buying in this range is not recommended.

It's suggested to sell for quick profits and for long-term investors to wait for a better period, while holding cash to capture the timing of market weakening and direction change, especially as VIX is currently surging strongly.

The Impact of Market Volatility on Investment Risk

Market volatility, not the likelihood of a market decline, is the key risk factor in upward-trending markets.

High volatility, as seen in large fluctuations and erratic market direction, requires caution to reduce risks.

Despite market fluctuations, the focus should be on principled investing to avoid significant setbacks and losses, especially in the current volatile market.