Korea's red-hot stock market is cracking as the government fights a currency cri
Thesis
When a government has to intervene to stop its currency from crashing, it creates massive uncertainty that usually drives foreign money out of the country's stock market. A market that has run up too hot, too fast is extremely vulnerable to a sharp pullback once the optimism fades. Smart money is already starting to hedge their positions and protect their gains. The combination of currency instability and an overextended stock market is a textbook setup for a correction.
Strategy approach
Build a short strategy on the South Korea ETF (EWY) on the daily timeframe. Enter short when the price breaks below the 10-day moving average on high volume (at least 150% of the 20-day average). Confirm with a negative MACD crossover. Cover profits at an 8% gain or close the position if it rises 4% above the entry price. Max hold of 15 trading days.