Why I bought EWY ETF After more than 30% Crash

Markets have a funny way of making you feel like a genius one week and a complete novice the next. While AI and semiconductor-related stocks have been crashing hard over the last few months, the ripple effects have hit the iShares MSCI South Korea ETF (EWY) especially hard, with the index plummeting over 30% from its recent peak. Just last week, we witnessed a stomach-churning more than 10% crash in a mere 10 trading days

For the retail investors who chased the parabolic top near $190–$210, this is the point of maximum anxiety. However, the chart below shows that this "crash" has actually triggered a high-conviction BUY_T2 signal within a Correction regime.

Here is why I’m stepping in to for a speculative trade while others are selling.

The Data: Why BUY_T2 Matters

When the market enters a "Correction" regime, the BUY_T2 signal acts as a mean-reversion re-entry trigger. Essentially, the market has overextended to the downside as shown in the chart below..

I’ve pulled the technical statistics from the backtest below to show you why the risk/reward here is so asymmetric:

Historical Performance: BUY_T2 Signal (CORRECTION Regime)

Metric	Value	What it means in plain English
Sample Size	14 Instances	This signal has appeared 14 times in similar market conditions.
Recovery Rate	100%	Every single time this signal has flashed in a correction, the price has eventually recovered.
Med R60 (60-Day Return)	0.1273	The median profit 60 days after the signal is roughly 12.7%.
Med MAE (Median Pain)	-0.24%	The "Median Maximum Adverse Excursion." This is the median amount the price dropped after the signal before heading up.
P90 MAE (Worst Pain)	0.00%	The "worst-case" drawdown for 90% of the historical cases. Interestingly, in this regime, there was effectively no further drop in 90% of instances.
Med TTR (Recovery Time)	1 Day	The median number of days it took for the price to get back to the "entry price" and start making money.
P90 TTR (Worst Recovery)	1 Day	In 90% of historical cases, the price recovered to the entry point within just one day.

The Game Plan: How I’m Trading this

The market is currently trapped in a cycle of fear because of the rapid 10-day drop. But the backtest tells a different story: a 100% historical recovery rate and a median 60-day upside of 12.7%. I’m not just throwing everything in at once, but in tranches. 

S&P500 Is Still Not Cheap Enough. My Model Found 3 Stocks Are Flashing Buy Right Now

In a recent post-retirement interview, Warren Buffett said this dip in US stock indices is nothing compared to the Great Financial Crisis (GFC) of 2008/2009. And honestly, he's right. Both the Dow Jones and S&P500 have barely dipped below 10% — technically, that's not even a correction, let alone a crash.

Now, regular readers of this blog know I've been working on a model to take emotions completely out of my investment decisions. And I've updated the model to use 2 anchor dates — one for the Macro, one for the Cycle.

For Macro, I use March 2009 (the GFC bottom) as the floor. For Cycle, I use March 2020 (COVID crash) as the floor. Simply put, the GFC low represents the long-term structural baseline, while the COVID low marks the last major cycle bottom. The model then runs the current stock price against these 2 floors and flags whenever price is testing either level.

So what did the signals tell me? Here's what I found.

Mag 7 Correction: This Mag 7 Stock Just Flashed a Buy Signal

Updated(4 April); Here is the update using the enhanced model of comparing to the anchor Macro date(GFC) and cycle date(COVID). This is the model which I have recently enhanced.

As shown in the chart below, in Feb., the signal was flashing Macro T2 and Dual T2. 

Macro T2 - this means that the price is cheap relative to both the short-term and the long-term history. And that this isn't just a localised dip; it is touching the long-term 'floor' of the entire post-2008 bull market.

Dual T2 - a Strong Accumulation signal. It means the stock is offering a significant discount, and that discount isn't just backed by one reference point — it's being validated by both historical support pillars, Macro and Cycle, at the same time. Two anchors confirming the same thing simultaneously.

 BackTest

Regime	Signal	Recovery	P90 MAE	Med TTR	Med R120
BULL	BUY_T1	1	-2.05%	1	0.2505414211
BULL	BUY_T2	1	-1.99%	1.5	0.2833161971
BULL	DUAL_T2	1	0.00%	1	0.4845446717
BULL	MACRO_T3	1	-4.72%	3	0.4882672341
BULL	MACRO_T2	1	-6.88%	3	0.4226849607
BEAR	DUAL_T3	1	-8.53%	4	0.2373489702
BEAR	MACRO_T2	1	-9.16%	1	NA
BEAR	CYCLE_T2	1	-18.99%	1	0.003932309102
BEAR	MACRO_T1	1	-23.96%	1	NA
BEAR	DUAL_T2	0.71	-17.51%	1	0.3156479201
BEAR	BUY_T1	1	-17.27%	16	0.09898475818

Based on the backtest results, in Bear regime, for Dual T2 signal, there is a 10% chance the price dips further 17.5% after entry. And for Macro T2 signal, there is a 10% chance the price dips further 9% after entry.

<Update END>

For years, the Magnificent Seven were the "Buy-and-Forget" staples of everyone's portfolio. But recent months have seen these tech titans stumble. 

What’s driving the sell-off? The ongoing Middle East crisis did not affect the stock price of this particular stock much. It’s a mix of "Agentic Panic"—fears that new AI agents from firms like Anthropic will disrupt existing software moats—and rising scepticism over whether the massive billions spent on chips will actually translate into bottom-line profits. Add in a shift in interest rate expectations, and you have a recipe for a tactical pullback.