The Biggest Bounce Most Missed

Korea's Healthier Bull

Korea just delivered the kind of move we were looking for in late July: a violent rebound after positioning, volatility and sentiment had been washed out. The KOSPI gained almost 13% last week, but the more interesting development is underneath the surface. Volatility is collapsing, foreign participation is rising, leverage is cooling and hedge funds remain underexposed.

The easy bounce has happened and resistance is approaching. But the character of the move is changing. Korea is starting to look less like a squeeze and more like a normalizing bull market.