Since the new year, the KOSPI has set a record high for 11 straight trading days. It is the third-longest record-setting rally on record. The market's expectations are surging on the steep upward curve, but there is also strong caution about a pullback after the short-term spike. Past cases show that right after the longest rallies, the market experienced a brief mixed phase, but in many cases, it regained upward momentum a month later and continued to rebound.
According to the Korea Exchange (KRX) on the 18th, the KOSPI index closed higher for 11 consecutive trading days as of the 16th. Since the KOSPI index was launched, this is the third-longest rally based on the last trading day, along with Dec. 14, 1988; June 8, 1999; July 28, 2009; and Sept. 16, 2025. The longest record is 13 trading days, which happened twice, on Feb. 2, 1984, and Sept. 24, 2019. The second-longest rally was 12 straight trading days ending on Apr. 7, 2006.
This rally also posted a large gain of 14.9%. It is the record high since June 8, 1999 (22.7%). Dec. 14, 1988 (11.8%); July 28, 2009 (10.7%); and Feb. 2, 1984 (9.9%) followed in terms of returns.
In the week after the turn lower, the trend was mixed. Among the seven cases with rallies of at least 11 trading days, the one-week return after the rally ended was evenly split, with four gains and three declines. There were gains on July 28, 2009 (2.6%); Apr. 7, 2006 (2.2%); Feb. 2, 1984 (0.9%); and Sept. 16, 2025 (1.1%). In contrast, there were pullbacks on June 8, 1999 (-5.8%); Dec. 14, 1988 (-2.6%); and Sept. 24, 2019 (-1.4%).
Widening the time frame to one month, the picture changed. In five of the seven cases, the one-month return turned higher. The order was June 8, 1999 (15.9%); Sept. 16, 2025 (10.8%); July 28, 2009 (4.9%); Apr. 7, 2006 (3.4%); and Feb. 2, 1984 (1%). Only Dec. 14, 1988 (-1.8%) and Sept. 24, 2019 (-0.7%) declined.
Taking historical data into account, the view is gaining traction that after a short-term pullback, the upward trend is likely to resume even after this rally. Park Seok-hyeon, a researcher at Woori Bank, said, "Except for the first half of 2019, after closing higher for 10 straight trading days or more, the KOSPI all went through a short-term pullback followed by additional gains and new highs," adding, "This time, too, attempts to break through to additional highs could continue, based on a recovery in economic growth and an improvement in corporate earnings."
Still, there is considerable caution that some pacing is needed in the short term. Kim Jong-min, senior research fellow at Samsung Securities, said, "Given how relentlessly the KOSPI index has run, we should allow for the possibility of a technical correction due to short-term overheating," adding, "It is effective to cash in part of the high-return stocks and re-enter during periods of heightened volatility."
By contrast, looking at the medium-term trend with a wider time series, there were more cases of a turn lower. There were declines in four instances: June 8, 1999 (-17.4%); Dec. 14, 1988 (-3.7%); July 28, 2009 (-8.5%); and Feb. 2, 1984 (-1.1%). Cases that continued to rise were limited to two: Sept. 24, 2019 (42.2%) and Apr. 7, 2006 (4.3%).
Variables that will determine the KOSPI's direction over the next six months include ▲ global currency policy, ▲ the corporate earnings cycle, and ▲ external risks. As Chair Jerome Powell's term enters a transition phase, whether the U.S. Federal Reserve will resume its rate-cutting stance and how the Bank of Korea will respond are expected to shape the liquidity environment. In addition, whether the profitability of AI corporations that have led the market will be proven by actual finalized results and quell the "bubble debate" will be a key point to watch for the KOSPI's medium-term trend.