Historic Divergences in KOSPI Suggest Extreme Caution

BTIG warns of extreme breadth divergence in South Korea's KOSPI, where 55% of the index is driven by just two semiconductor stocks while most other names are falling. Technical analyst Jonathan Krinsky suggests caution as the EWY ETF hits resistance amidst this deterioration.

Key Takeaways

• 1.The South Korean KOSPI index is experiencing extreme breadth divergence; while the index hit all-time highs, the vast majority of individual stocks are declining.
• 2.KOSPI concentration risk is severe, with SK Hynix and Samsung comprising approximately 55% of the index, masking broad market weakness.
• 3.Technical indicators suggest a potential downside reversal for the EWY ETF as it gaps into trendline resistance amidst deteriorating breadth.

Table of Contents

• Extreme Breadth Divergence.
• All Not Created Equal.
• Gapping Into Resistance.

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