Hong Hao: The correction window for tech stocks may last until the end of August, although a double-digit rebound is possible in the short term.

According to Odaily, on July 31, at a private offline event held by an exchange, renowned economist Hong Hao stated that the previously predicted major correction window has opened and is expected to last until around the end of August. In the short term, there may be a double-digit rebound, but the current market is still in a deleveraging phase, so investors can afford to be more patient.

Hong Hao pointed out that the KOSPI Index in South Korea has already fallen significantly from its high, and the market is now entering a phase where bulls are accumulating on dips while bears are cutting losses and exiting. Due to the index's heavy weighting in a few major tech companies, the fundamental performance of these leaders remains the key factor in determining whether the market has truly bottomed out.

As for whether investors should immediately allocate to tech stocks, Hong Hao said that in the next two to three weeks, the signals of a market bottom are likely to become clearer, making it more important to remain patient until then. He reminded that a typical asset bubble burst often undergoes a two-thirds or even larger correction. While the market has already seen about a 50% decline, further downside cannot yet be ruled out.

Hong Hao also stated that, in addition to price trends, attention should be paid to the impact of South Korea’s regulatory policies, the deleveraging process, and overseas leveraged ETFs on the market. He believes that if this correction is completed relatively quickly, it will also offer more attractive allocation opportunities for investors who are bullish on relevant assets in the long term.