GET READY! Historic Gain Potential When This Setup Happens Next

Market chaos in Korea and even in Japan is [music] having a huge trickle-down effect in the US. How can you be ready to buy the dip the next time it happens? Joining us today is Market Beat analyst Jeffrey Neil Johnson with some important advice to know before you buy the dip. Jeffrey, thank you so much for being here. We've seen plenty of headlines on both of these countries, especially what's been happening with the market and their currency. Let's talk a little bit about what's happening and how really the whole global markets are reacting. >> You know, um, you have issues in Korea where they have a a highly leveraged stock market and then you have issues in Japan where there are currency issues between the US currency and the Japanese currency. Those together, combined with fears of an AI bubble, create a really volatile situation where stocks can just drop massive amounts for seemingly no reason at all. >> Yeah, we absolutely saw that play out over the last few weeks in the market and while things are climbing back now, I think it's important for investors to be ready for the next time this happens because if history is any indicator, uh, this could likely happen again. Let's talk about Korea in particular. They've had multiple instances of some major issues in the market. >> Right. So, in Korea, their their market's highly engaged with retail traders and so those retail traders tend to use a lot of margin and they tend to use a lot of leverage. And when there's even the slightest hiccup over there with, say, Samsung or SK Hynix, that leverage creates kind of a Jenga tower that collapses very quickly under that. And so, just the smallest little hiccup over there can cause a massive, uh, drop in their market and it and it can drop so much, in fact, that they halt the market entirely. >> Yeah, and that's happened so many times this year. Let's look at the the data on the numbers that we saw of how many times that happened in Korean markets. >> Yeah, so it's happened so far 10 times in 2026 and that's pretty profound for the entire market. In the US, we have stocks that get halted on a regular basis, but it's very rare that the entire market halts. So, 10 times in Korea, the market, the entire market has halted, and that's happened four times just recently, um just as recently as the month of July. So, during the month of July, it happened four times, and it's happened 10 times over 2026 altogether. >> Uh that is where I think we see the trickle-down effects into the rest of the global markets, especially in the US market. And you are going to get to five names tied to the US market that are really strongly impacted by these halts in the Korean market, but also by what's happening in Japan. So, we're going to get into those five names so that you should be ready to buy the dip on the next time we might see something like this happen. But, I want to talk a little bit more about Japan, too, and why what happens there with their currency issues that we've talked about on the channel before. Why does that have a trickle-down effect into the US market too? >> So, kind of for the same reasons that it does over in Korea, the US has had a strong currency against Japan for a long time, and that has created what hedge fund managers use as what's called a Japanese carry trade, where they use Japanese money to buy American stocks. And so, when the um interest rate in America changes dramatically, or the interest rate in Japan changes dramatically, um the the currency changes the the power of the currency against each other also changes dramatically. And that means that a lot of times, these hedge fund managers have to very quickly unwind their trades from the Japanese yen, which then causes American stocks to suffer, but also underlying Japanese stocks will suffer heavily as well, because a whole bunch of money has to flood out of the market real quick, um due to those changes within the currencies. >> Yeah, we are seeing that money flood out of the market and impacting many different stock charts, and that is going to show up in the five stocks that we have to talk about today. So, Jeffrey, let's dive into it. We've kind of talked about the why you should be paying attention to this, and here is kind of a game plan of what to watch for if these setups happen again, because those ripple effects will continue, and it could create opportunity for investors. So, what is that first stock where you can see some opportunity to buy the dip if these Asian markets continue to see this kind of volatility? >> Okay, so the first one we're going to talk about is Nvidia, and it's the, you know, the granddaddy of chip stocks. And so, the reason that it suffers on the Korean side is when the Korean stock when the Korean stock market resets, all of Nvidia's high-bandwidth memory comes from SK Hynix. And so, when the Korean stock market has issues, it creates supply chain risk issues on Nvidia's side and causes those stocks to dump. On the same thing, um on the Japanese side, when uh there's issues with the yen and the Nikkei, algorithmic trading happens, and those stocks automatically get dumped as well. And in both cases, the markets do not stop moving. And so, these hedge fund managers have to have some way to keep their their hedge funds liquid, and the only way that they can do that is by trading American equities. And the gold standard in American equities is Nvidia, so it's going to be the first one that gets traded off as well. And so, in any of these events where there are currency or market risks, Nvidia is going to be the first one to suffer. But the reason that it's suffering has nothing to do with its backlog and has nothing to do with its performance. >> Yeah, it makes sense that Nvidia would be the first place where any company who needs to pull some cash would pull from, because so many people pretty much everyone is invested in Nvidia in some way. Let's look at the chart a little bit to see where those uh dips may have shown up. You can look at to the end of July, and there was a really big pullback in Nvidia. Let's talk about how that correlates to what was happening in Korea and Japan at the time. >> Right. So, um there are a lot of analysts that call that pullback in Nvidia, they're calling it the triple whammy event. There was the start of the earnings reports coming out, and there was some earnings tension around that, and that started pushing the stocks down a little bit lower. Right after that became an issue, the Korean stock market halted and created an even bigger issue, and then at the same time, right after that happened, we had the Japanese yen get bailed out by the US, and so you literally had all three of the biggest fears happen one right after the next, and it just pushed that stock down. It had absolutely nothing to do with Nvidia's fundamentals. It was legitimately just like a liquidity event. >> Yeah, so this is one of those stocks that reacted tremendously to all of those fears in the market, and that does make sense, cuz Nvidia absolutely leads the market reaction. So, if you see a strong reaction in Nvidia, you likely see a reaction in the rest of the market, which we did during this time. Nvidia just seemed to react the strongest. I think the question for investors is, could this happen again? Are the issues in Korea and Japan currencies still present, and could we see a similar pullback again in the future? >> Yes, you absolutely could. So, these are the events that you're going to look for if you're wanting to start a position in any of these stocks, you'll want to wait for one of these events to happen. Or, if you're wanting to average down or even build on the position that you have now, when these events happen, they create perfect environments for you to accumulate because they're not dropping for any fundamental reason, they're just dropping because the the market is forcing them down. >> Interesting to know that these opportunities could still come down the road in the market yet this year. And of course, also makes sense that Nvidia would be one of the ones most impacted by this. It's one of the Mag 7, and we know the other Mag 7 names can be impacted, too. If you want to see the list of other stocks that could be magnificent in the year ahead, these are stocks that have tremendous growth potential that are also becoming key players in the market, make sure to check out the special report at marketbeat.com on seven stocks that will be magnificent in 2026. You can scan the QR code or click the link in the description to access that premium report for free right now. Again, if you go to our website and try to get this report yourself, you're going to have a $30 paywall on it, but if you scan the QR code or click that link in this video, you will get free access to that report today. Jeffrey, let's move on. You we talked about Nvidia, a good starting point for this how to buy the dip in the Asian markets. What's the second stock that you would look at the next time this Korean chaos and Japanese currency issue comes up. >> So, the next one I'm going to look at is Micron. And the reason that they're the one to be looking at is because they're part of like the triopoly. So, you have Micron, you have Samsung, you have SK Hynix, right? Well, Samsung and SK Hynix are taken out of the out of the picture, all you have left is Micron. And so, Micron's looked at as like a liquid proxy. When I you know, when we were talking about how when the market freezes, they have to sell off American equities. Well, when when that happens, Micron is one of the biggest ones that they sell to hedge against Samsung and SK Hynix because they would assume that Micron is going to go down the same level that Samsung and SK Hynix go down during that freeze. >> All right. What I found interesting, and maybe contrary to what some investors might think about when you see chaos in Korea, you might first think let's buy SK Hynix because that stock is getting hit because of what's happening in those markets right now. But you're saying buy Micron instead. So, before we get into more on Micron, why would you not buy SK Hynix in this case? >> Well, you know, earlier we were talking about how when the market gets overly leveraged, it becomes like a Jenga tower. SK Hynix is literally the piece that they pull that makes the the entire tower collapse. Everyone in South Korea, or the bulk of the South Korean retail investment market, is highly leveraged, and most of them are invested in SK Hynix, right? And so, what's going to happen is is when the Jenga Tower collapses, SK Hynix is going to collapse first and it'll probably collapse the hardest because it's leveraged the most, right? There's still a lot of leverage action in Micron, but nowhere near as much leverage action as there is in Samsung and SK Hynix. >> Yeah, do you don't think it's a time to buy that dip when it does crash hard like that? >> I really don't because until the Korean stock market really bottoms out, you can have these events over and over and over and over again and you really don't know how leveraged the South Korean market is at any one given point. Uh most recently the head of the South Korean stock market came out and actually apologized to the people of South Korea for allowing these leveraged ETFs to happen and we're actually seeing that same kind of leveraging going on in the US, but nowhere near as bad as what we're seeing in places like Korea. >> Yeah, and Micron is a great example of that. Micron has multiple leverage ETFs out there that see a lot of major moves because the stock has been moving so much recently. So let's talk about um Micron as the safer play here. So what you're saying is you might see an impact in Micron, but not nowhere near to where SK Hynix will be. >> The thing about Micron is is that when the Korean market halts, right? They have to sell Micron for no reason. And so you want to buy the dips there because Micron's capacity is sold out to contractually obligated, you know, situations all the way through 2027. So as they push Micron down, if you can get into there and and accumulate on the bottom of that, then you're really buying Micron at a severe like discount to what it should be because the dip in Micron should have never happened based on, you know, just the the Korean stock market being halted. >> Interesting. Is this one that also shows up in Micron's chart where you can go back and see kind of a timeline of when we saw the pullback in Micron to what's been happening in Korea? >> Yeah, they they're actually just now starting to stabilize out from the last set of events that happened in July. These triggering events, they're they're liquidity cascade. And so they happen, let's say over a 2-week period of time or over a 1-week period of time. These liquidity events are like cascade, they happen over say a 10-day period of time, but then once they finish, there's always the chance that they start right over again because they're literally liquidating people out of the market. When it gets to the point that it stabilizes, it only takes the smallest little hiccup to start the ball rolling again. >> All right, so Micron is another stock to watch for the next time this happens to see if you see other correlating dips. Let's move on to that third stock that you were watching as a potential to buy the dip the next time we see some chaos in the Asian markets. >> Right, so another one is Advantest, and it's an it's an over-the-counter stock here, but it's a huge stock over in Japan. And the reason I like them is because they are really kind of considered the ASML of testing. So ASML has a lock-in on lithography, Advantest has a lock-in on testing. So once the chip is made, before it goes out the door, the chip has to be tested because if it gets put into a machine and it fails, you have like a $30,000 problem at that point. And Advantest is the company that makes these these benches that do the testing, and they're located in Japan. Anytime the Japanese yen suffers against the US dollar, that stock is going to suffer a lot more than than it should, allowing you to buy an ASML level stock on a dip. >> So this one is more tied to the the move in the the Japanese currency, more so than the Korean markets. And so far, the first two we've talked about have more closely tied to Korea. Let's talk a little bit more about this Japanese currency issue and whether that could happen again, whether we could see continued issues spike with that one in the market. >> It could absolutely happen again. You know, the administration in Japan has said that they are struggling to stabilize the yen. And as it tries to stabilize against the US dollar, and of course there's a lot of volatility in the US dollar as well. As they try to stabilize against each other, that friction creates this problem, right? Every time we change our interest rates, or every time they change their interest rates, it creates that friction that rebalances these trades. >> Still some potential for volatility ahead, but right now that volatility seems to be spiking on the upside. But like much of the market, this stock in particular has absolutely recovered for that slump that it saw at the end of July. Do you think that that growth story is going to continue, or do you think that we can expect more volatility even though we're at these new highs today? >> The average trader tends to believe that the market is second by second, but it takes a lot of time for the market to to digest that. So, this these stocks have all been climbing for the past 2 weeks, right? But over the entire month of July, during those KOSPI resets, they all struggled. So, we had four out of 10, so 40% of the KOSPI resets, 40% of the Korean stock market halts happened in July. And so, over, you know, that's like one a week, basically. So, we're really kind of maybe only looking at like a 2-week period since then to allow the market to digest this. I absolutely believe that this is not the end of these series of issues that you'll see. This is just the lull in the middle, you know? This is maybe even the eye of the hurricane, if you would. >> All right. So, interesting theory on whether this is a partly the cause of that summer slump that we saw in so many different stocks. A lot of the market was down in July, and to see the correlation between what was happening globally is interesting to look at, and it absolutely kind of reflects in these charts. So, I think that's a little bit to be expected in any AI stock right now, where we do see that kind of volatility. For you, why is the volatility worth it in this one? What's the long-term growth story here? >> So, you know, the long-term growth story here is that this company has such a huge moat, right? You You look at company like ASML on the lithography side, they have a massive moat on the printing of chips. Well, once those chips are made and they go to someplace like Nvidia or Micron and they're packaged up and shipped out, before they are shipped out, they have to be tested. If they're not tested, then you run the risk of shipping 30 to 100,000 dollars worth of gear out the door that's literally just a paperweight. The moat for them is they are the company that makes the test benches. So, where ASML makes the printers, they make the testers. Without Advantest, you can't send the chip out the door. And so, it gives this lock-in between ASML and Advantest that doesn't um that doesn't really exist anywhere else. And when you talk about companies like SK Hynix and making their debut over to the to the to the US stock market, this is one of the companies that I would absolutely love to see transition from the Nikkei to like the Nasdaq or to the NYSE because this is a really good stock. >> Yeah, there's a lot of those over in those markets right now. We're seeing so much of the AI trade tied to some of these Asian markets and just finally starting to get some US exposure and trade on the US markets, too. Um if you are again interested in diving into more of those names that are the strongest names in the market right now and could be some of the biggest players throughout the rest of the year, this is a reminder to check out that special report again on those seven stocks that could be the most magnificent of 2026. We've got that QR code, that link in the description to check out that free report for yourself today. All right, Jeffry, let's move on to that fourth stock that you are looking at as a buy-the-dip potential the next time we see any kind of volatility out of Korea or Japan. >> Right. So, number four is going to be Arm. But, the reason I like Arm specifically is because they're 90% owned by SoftBank. So, anytime that there's an issue in Japan, they're going to they're going to suffer through SoftBank, right? But, there's nothing like nothing has changed at ARM. There's no fundamental issue at ARM. They're just suffering because SoftBank is suffering because the yen and the and the Nikkei index is suffering. So, anytime there's a dip in ARM, that's a place that you're going to want to buy if it's tied to this to the geopolitical or to the currency issues or any of that, that's where you're going to want to try to pick up ARM at a discount. >> Let's look at how that played out the last time we saw some headlines coming out of Japan. Did we see that massive dip? >> Yeah, there there has been dips. Um there was there's been dips and rallies since then because there's been a lot of noise back and forth between the US and Japan over, you know, the currency fluctuations that are going on. >> So, let's talk about timing those potential dips that may come. How soon do we see a stock like ARM react to a new headline or a new announcement that has something to do with Japan's currency or whatever might be happening? >> They react almost immediately, but what you want to do is you want to kind of leave like a contagion plan, right? Because it's going to infect the market. It's going to go across the market like an infection. And so, it takes about 48 hours for that to all kind of happen. And so, instead of trying to chase the bottom, you'll buy in kind of small tranches after say maybe the first 24 hours on through the 48 hours where you look for lows and kind of average down until you get it, you know, as tight and as low as you can. >> Is ARM the only one susceptible to this or are there other companies that are kind of in the same position as ARM because of SoftBank? >> I think that the entire web, right? The entire technical web, the tech sector, the AI, quantum, all of these stocks are stocks that I've picked because the volatility tends to affect the tech sector and it's all because of like the AI thesis and the upcoming quantum thesis and the volatility and surety of all that. And so, I think that anytime that there's volatility, major volatility, it's going to kind of ripple its way through the web, whether the volatility comes from an issue here in the US or whether it comes from issues over in Japan, or whether, you know, it comes from issues in Korea. It's such a tied-together market at this point that just the slightest little vibration on one side can create a butterfly effect on the other side. >> Now, that butterfly effect is exactly what we were talking about in this video today is to watch for the butterfly effect and it make sure that you're paying attention and be ready to react with your own funds and investments whenever those little butterfly wings start to move. And we're seeing so much of that right now across the whole globe. Let's get on to that last stock. We're kind of rapid-firing through these last ones, but what's the last stock on your buy the dip list to be paying attention for that butterfly effect? >> Right. So, the last one on my list is going to be IBM. And the reason that I like IBM, and the reason that it's on this list, is because just like hedge fund managers here in the US, the hedge fund managers in Japan, and the hedge fund managers in Korea, they have to put money somewhere. So, when these issues happen where the market becomes highly volatile or there's an issue in currency exchange rates, the money gets sent to IBM to be held as like a safety vault, basically, so that it it can be safe until everything levels back out and it can be pulled out of IBM and put back into circulation. >> I feel like IBM is a little bit of a interesting choice for a safety vault because this stock volatility as of recent looks anything but safe. There's a ton of volatility in this chart. Why is that? >> Well, they had, of course, you know, they're going to suffer anytime that there's an issue with the AI thesis. And anytime that there's a dip, they're going to suffer, just like everybody else suffers. They may not suffer as much because they're a conglomerate, so they're not going to dip on everything cuz they have their they have their hands in so many pies. The the volatility comes from that. It also comes from they're doing a lot of spending on the quantum side right now. So, there's uh a lot of volatility from their quantum spending. And then also, they had uh a lot of volatility post earnings because they did miss a little bit on their earnings a bit. >> Yeah, there's a multiple factors that lead to dips. I think that's important to point out in this video, too, is we're talking about the butterfly effect from what's happening in Korea and what's happening in Japan. But, those are just one of many factors that can impact a stock and send it soaring or dropping really quickly, too. So, that's something to to note is that these are just a couple of potential factors that could lead to a dip, but it's not the only thing that can impact these stocks. And I think that's important to look at. How massive of a factor do you think what's happening Korea and what's happening in Japan can be for stocks? Or is it uh one of a long list of of possible impacts that could send a stock moving either direction? >> You know, I think it's one of the long list, you know, just like when we when you talked about that big dip with Nvidia, it was just one thing after the next after the next after the next. And it And none of it had anything to do with Nvidia. None of it had to do with their backlog or their ability to put out chips or anything like that. It was just one geopolitical or macroeconomic issue after the next that just made Nvidia suffer because, you know, a lot of these stocks, these bigger stocks like IBM, Nvidia, and Micron, they're seen as almost like virtual gold by hedge fund managers and by investors around the world. So, when they need to hide money, they're going to stick it in a place like IBM. When they need to liquidate money, they're going to liquidate it from places like Nvidia and Micron because when SK Hynix suffers amazingly, Nvidia's going to suffer. They're just not going to suffer as much. And the same thing with Micron and IBM, they're going to suffer. They're just not going to suffer as much as say Samsung or SK Hynix does. >> Yeah, right now it does look like IBM's stock price is suffering a little bit. It's down about 20% for the year, and that volatility again, it's down quite a bit off of its highs. Is this stock still a buy the dip opportunity right now where it's at, or is this one where you would wait for one of those factors like something happening in Korea or Japan, maybe lowering the price even more from where it's at today? >> So, you asked about the um about the volatility and why they would stick money into this and see it as a savings ball. It's because IBM is trading at an at a massive discount to its peers, right? So, you have the choice of finding a peer that's that's safe, let's say Nvidia, but if Nvidia's trading at the top, then you're putting your money into the bank at the top. IBM's not trading at the top. It's trading at a huge discount to its peers, so you're putting money in on the ground floor. You're not putting money in on the top floor. That way if it collapses, your money's on the ground floor. It didn't fall off the top. >> Yeah, do you think that there was anything concerning in that IBM earnings report that led to some of this downfall that concerns you long-term, or do you think this is still a very good long-term play? >> Yeah, nothing ever concerns me with IBM as far as their long-term vision. They've been around for what, a thousand years? They're going to be around for a thousand more years. They've always been on the cutting edge, and when you look at things like quantum and you look at things like AI, and you and you go back and you look at things like the mobile phone and the computer, every single instance IBM has had dips where they've had to spend massive amounts of money to do massive amounts of development. And when they reach the bottom of that dip, it just takes off from there. Well, we're we're getting close to the floor when it comes to AI. We're getting very close to the floor when it comes to quantum, and IBM is heavily invested in both of those situations, which then means that if you're a fundamental investor, they're you're really sitting on the ground floor of a stock that is technically in a position to take off. >> Yeah, if you were an investor who is interested in quantum computing investing right now, make sure to watch this video where we detailed some of the best ways to buy the dip in quantum and why right now when no one is talking about it is really the best time to look at buying. You can watch that full interview here.