The Most Obvious Capitulation Point in 20 years

AP Headline, October 29, 2025: Shares Surge Ahead of Fed’s Rate Decision, as Trump’s Asian Tour Sends Nikkei to a Record 

If that trifecta of wins isn’t enough, we also have the $SPX approaching the 7,000-point milestone, Dow sniffing 50k, and NVIDIA now the poster child for headline risk.

"Wall Street futures rise as Nvidia eyes $5 trillion market cap"

— Reuters

 

Of course CNBC's calling this "historic"—because nothing screams genius like valuation theory and round-number targets. These are not smart people; they're just really good at reading teleprompters. 

Don’t Forget about The Buffet Effect

The Pied Piper of Omaha has been luring wide-eyed investors into Japanese markets since Berkshire Hathaway first started scooping up “trading houses”, back in the summer of 2019. (many sources) 

*He even jetted to Tokyo in 2023 with heir apparent Greg Abel, schmoozing CEOs and vowing to hold these gems "forever."

morningstar.com

*It's classic Buffett: Borrow cheap yen via samurai bonds (he's issued billions since 2019, hedging at sub-1% rates), pocket 4-5% dividends, and watch the math compound while the BOJ keeps the party going.

businessinsider.com

*But here's the trap for the rest of us mortals—while Warren's got the firepower to weather a yen snapback, his fan club piles in via ETFs like $EWJ, mistaking his genius for a green light on the entire Nikkei bubble. It's the ultimate lemming lure: "If it's good enough for the Sage, it must be bulletproof." Spoiler: When the carry trade reverses (and it will), those "forever" trades turn into fire sales, and Tokyo's exporters get torched. Thanks for the vote of confidence, Warren—now pass the popcorn.

Black Swan Watch: Capitulation Incoming

Japan's 50K breach isn't just a number—it's the psychological peak, the "black swan" shadow we've tracked since August. Tokyo: the Japanese Nikkei 225 finally smashed through 50,000 target on October 27.

 

 

This isn't just a milestone; it's the most obvious market top I've seen in my career. And it's unfolding right as President Trump jets through Asia, charming leaders from Japan, to South Korea where a high-stakes meeting with Xi Jinping is set for Thursday.

Japan and its weaponized yen/ carry trade

 

 

• August 7, 2024: Reviewing The Most Recent Market Crash – The Who, What, When, Where, Why of the Story
  (Global equities tanked as yen strength triggered carry trade liquidations, wiping out trillions in leveraged bets.)
•  October 10, 2025: Weekly Wrap – Reviewing Friday’s Carnage
  (Another yen spike sent shockwaves; VIX spiked to 25, and we saw the first cracks in the post-summer rally.)

If you've been here from the start, you know Japan—and its weaponized yen/ carry trade—has been the black swan lurking in the global economy's shadow since that August meltdown. From Tokyo's endless BOJ interventions to how it ripples into U.S. Treasuries and AI stock valuations. 

 

The Everything Bubble: Japan’s the Fuse, But It's All Connected

This isn't isolated Tokyo madness; it's the canary in the coal mine for global excess. Gold, Bitcoin/ Crypto, and a hell-a-lot of AI hype? NVIDIA's "trillion-dollar" chase is just the latest symptom. China's wobbly, Germany's yield curve's inverting, and U.S. mega-caps are at 30x earnings. Japan's the spark—overbought, overleveraged, and overdue.Enter today's FOMC: 

Markets are 99% priced for a 25bps cut to 3.75%-4.00%, the second this year after September's easing. Powell's speech at 2 PM ET will be "data-dependent" code for "we're not done cutting," with 94% odds of another in December.

The Dog Whistle to the Short Sellers: 

*Spotted on Bloomberg this morning: Julian Emanuel, Evercore ISI's chief equity & quant strategist, dropping truth bombs. "There's a little bit too much exuberance," he said, noting derisive jabs at his S&P 7750 year-end 2026 target. 

 

Translation: When the street mocks your bull case as "not aggressive enough," it's time to fade the rally. Emanuel's no perma-bear—he's bullish long-term, even floating a 30% shot at S&P 9,000 by 2026 in a full bubble blow-off. Bloomberg.com

 

 

I see this appearance as a dog whistle to shorts: Load up, the top's in. And yesterday's VIX pop? That's the fear gauge twitching, confirming someone's buying put protection months out.


Take Care,

AA


*Researched exclusively by Grok/AI

 

 

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