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Saturday, October 11, 2025

Weekly Wrap - Reviewing Friday's Carnage

October 10th, 2025 - Yesterday's market action can only be described as your typical panic sell Friday.
 
Trump received most of the blame, but the selling didn't start in the US. It started with a Crypto crash on 
Tuesday, selling in China, and a gap fade in Japan (overnight). More to come on that domino effect in a 
moment...
 
Most US investors probably think the rest of world (ROW) follows US equities markets, but a global 
economy requires two-way flows of capital and synchronized policy responses across time zones. 
What happens in Asia doesn't stay in Asia - it's a precursor, not a follower.

Asian markets mixed as tech valuations and global cues weigh on sentiment newindianexpress.com


 A sculpture of a bull decorated in the Chinese flag is seen above a securities exchange in Hong Kong
 

All The Warning Signs Were Flashing 

  • China had been in a stealth sell-off all week – Lingering property woes and export jitters set 
    the stage     for broader risk aversion.
  •  Crypto markets received a shot across the bow earlier in the week.

    Tuesday, Oct. 7th: Crypto market wipes out $60 billion in 1 hour. coindesk.com (Bitcoin briefly
    dipped nearly 10% amid early tariff whispers, erasing billions in a flash—echoing the $280B
    wipeout that hit later in the week.fxstreet.com

     

  • Fri, October 10, 2025 at 2:37 AM CDT could a Yen Carry Unwind Become the Next Black Swan Event? (Yahoo Finance)

    What goes up must come down 

    If you follow the news cycle like I do, then you already know the Japanese @NIKKEI recently gapped up 4% on election news. Even CNBC reported on this.   

    Politics jolts markets as Japan stocks SOAR 4%, bitcoin leaps to record high with gold msn.com

    As someone who has been predicting a global unwind, starting in Japan for months/years (well documented further down the page) I immediately started doing my own do diligence and tweeted this out on October 9th, the day below markets crashed. 

  •  The growing Nikkei/ Bitcoin's shadow vibe 

    There's a growing "Nikkei as Bitcoin's shadow" vibe, especially in Asian hours when low $BTC volume (~20-30% of daily total) lets JPY flows dictate swings. #Funfact #Crypto

    — Veteran Market Timer (@3Xtraders) October 9, 2025

  • October 10th, 2025 Why Japan’s coalition collapsed, and what’s next

    [Edit) Of course this went mostly unreported, just as the August collapse did, and I found most of this information digging for more information Sunday morning.   





    Tracking the Unwind: My Previous Takes on Japan


  • Echoing the August 7th, 2024 crash I dissected here:.Reviewing The Most Recent Market Crash - The Who, What, When, Where, Why, of the Story   

 "Is this the big one? Probably not. This looks like a dress rehearsal, for what I suspect is coming in 2025." 

"I think a lot of the funny market action we're seeing is do to the fact that machines are running the market, but also excess liquidity has to go somewhere - Crypto, Japan, even India - not to mention Russian investor money finding it's way into foreign markets. On top of all that we have daily options, being used to drive the $VIX, and the rest of the highly manipulated options market. I think maybe someday we may get back to more normal/stable markets, but not until after a major collapse, and possibly the entire collapse of the global financial system."  

  Trump Bombshell 

I was already anticipating a Trump bombshell, when it was announced - before the opening bell - 

that Trump was scheduled to address to the nation from the oval office, after the market close. 

  Grok later quipped:  

"Haha, you called the Trump bombshell vibe perfectly—just the flavor was off!"

US Markets opened on the heels of bad news pouring out of Asia , only to crash when breaking news hit: Trump is threatening to unleash massive tariffs on China.  Déjà vu, no? It feels like liberation day all over again.    

I can pinpoint the exact time this news hit the wire, based on the $VIX action we were seeing.   

 $VIX Puzzle: Orderly Sell-off or Orchestrated Move 

I don't usually reveal my $VIX charts, but I have a fascinating observation. $VIX - ended the day around the same levels we saw back in August, yet the overall damage that was done to the market was far worse (more than double).  
 

Without giving away the whole enchilada: I can tell you I saw the breakout on the VIX (above 17) coming, earlier in the week, and that alert alert was triggered multiple times. You can find the same breakout target, if you extend the blue line seen in the chart view above.      

Think back to the epic yen-funded carry trade unwind in August 2024, which spiked the $VIX to 61 at the opening bell! That was raw shock as the market opened down roughly -1000 Dow points.

Yesterday, Friday? Different story. The muted $VIX suggests Wall Street wasn’t surprised—perhaps this sell-off was well-orchestrated. 

Was Trump’s press release used as the catalyst to help drive the VIX into a breakout and crash the market? I’ll leave that for you to ponder.

The relatively low $VIX also implies that the market isn't pricing in volatility ahead of Columbus Day (a banking holiday), and upcoming 3rd quarter earnings. Didn't I warn you about this?   

 Monday, Sept. 29, 2025 Crypto Rebounds, Gold Soars as $USD Weakens: October Shakeout Looms

  "I'd be looking for an early October re-balancing, and perhaps the looming government shutdown will be the catalyst for a sell-off?" 

 Don't Expect Clarity From the Networks 

 It's becoming hard to tell what's real anymore, when talking heads obsess over the government shutdown, or other TDS distractions, while ignoring the real drivers... yet they didn't have any trouble reporting several times that the $VIX was screaming investor complacency? 

I called them out on there propaganda  

Not only have the networks been pushing this false $VIX narrative for several weeks, but Jim Cramer was seen the night before the crash, telling his viewers "It’s time to sell frothy speculative stocks...". Is Cramer a genius, or does he have friends on Wall Street filling him in on what comes next. I'll leave that for you to ponder?    

 Selling Accelerates 

Once the sell-off began to gain some traction they finally reported that "investor jitters" over renewed U.S.–China trade tensions ibttimes.com). " jitters"? On the day the market shed $1.2t  - worst sell-off since the April crash? Try "BLOODBATH"! 

Downside momentum continued to build during the course of the day, and by the time the closing bell rang, cryptocurrency was in total free fall, dragging tech stocks with it, proving Crypto is hopelessly tied to the US tech sector, and speculative AI plays. Nearly every single sector Ive been trying to warn investors about tumbled simultaneously. 

Anyone who has been following me on the X platform knows I've been banging the bear drum nearly every single day, as the market has continued to consolidate mostly sideways. 

The $SPX rally seems to be getting a little long in the tooth, isn't it. Most unhealthy market I've ever seen. #SPY #Mag7 #Semis #AI $NDX #Nasdaq pic.twitter.com/nFEJiyIFRl

— Veteran Market Timer (@3Xtraders) October 9, 2025

Only a couple sectors were left unscathed. Utilities, miners, though don't be surprised when the baby is tossed out with the bathwater, next time!  

The selloff didn't catch me off guard, and I'm already eyeing the next crash target.      

After-Hours Crypto Unwind: Tariffs Trigger Chaos

 

Closing Thoughts: FOMO Fuels the Rebound

 

The selling didn't start in the US so I don't expect it to end there. If Japan can stabilize, and we see Crypto buying in Asia, then the US shouldn't have any trouble pulling out of this swan dive.  

Barring a $VIX breakout (unlikely with a banking holiday looming), this looks like a typical one-day sell-off. But here’s the kicker: every recent market crash seems to trigger an even more vicious response in the FOMO, especially in crypto and speculative plays. Why should this time be different? Watch for crypto bottom feeder sniffing around the $BTC 108k level, with AI stocks staging a quick recovery. I suspect the machines and excess liquidity will keep the cycle spinning—until the next big one hits.

Take Care, AA  

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