A second straight circuit-breaker session in Seoul has Korean authorities moving against leverage, and US chips are wearing the consequences. Meanwhile the mechanics that pushed oil lower for three days appear to have run their course.
Korea's KOSPI was down another 6% overnight. It's pretty clear to the seasoned investor that what's going on over there is being driven by certain market mechanics that have gotten a bit out of hand. In the wake of Seoul's second consecutive circuit-breaker session, Korean authorities are taking action to limit leverage. The transferred effect on US semis isn't dollar-for-dollar, but it does complicate the read on finding the new support levels.
Meanwhile, the market mechanics driving oil lower over the past three days seem to have played themselves out. Recent counter-attacks by Iran, though reportedly unsuccessful, have reminded us that the conflict is far from resolved and that oil supply is still crimped. Agile traders will take note of the support this dynamic lends to major players in the oil space, which are showing bid support in today's pre-market.
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