Analysis: The South Korean stock market is expected to see a "Sell-off before Buy-in" scenario on Monday, providing a good buying opportunity after leverage unwinding.

June 7 — Trader 3X Long Labubu stated he is bearish on the near-term outlook for South Korea’s stock market but is positioning to buy the dip once it hits bottom. He plans to use a "sell first, buy later" deleveraging trading strategy. The trader forecast a strong likelihood of a sharp decline in the South Korean KOSPI index on Monday, with the 7050 level as a key focal point. Unless NVIDIA CEO Jensen Huang delivers a clear positive catalyst before South Korea’s market opens, the KOSPI is on track for a severe, dramatic plunge. Currently, South Korea’s market is heavily leveraged, with retail investors often utilizing 5x leverage. Once panic takes hold, a 15-20% single-day drop is highly plausible, which could potentially trigger a circuit breaker. Looking at KOSPI futures and the U.S.-listed EWY (the South Korea ETF), the market has already priced in a large portion of the anticipated decline upfront. The trader also pointed out that the key buy signal after a plunge is a simultaneous bottoming of both U.S. and South Korean stocks. His plan is to purchase Nasdaq futures and South Korea’s 3x leverage ETF during the overnight trading session. Additionally, one should not enter the market immediately when price hits a key level (such as the 21-day moving average). Instead, wait for a key candlestick to form a bottom at a support level, watch for the subsequent candlestick to show a bounce, then confirm the entry—this is a more prudent approach.