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Yesterday, I warned that the silver gravy train was over. Today it crashed 30%.

While traders were getting margin calls and forced out of leveraged positions, I was watching the exact scenario I'd laid out play out in real time. The gamma squeeze that drove silver from $63 to $110? Dead.

Why I Called It

The options market was screaming that the leverage unwind was coming. Silver hit 100% IV percentile - highest all year. When someone in chat mentioned buying silver in their 401k, my response was blunt: "Really? Do you really wanna get caught up in this?"

We'd lost the one driver behind Silver's parabolic run. Once volatility exploded and the skew flattened out, there was no edge left. The gamma squeeze from call buying was cooked.

"This thing could get halved," I said. At $45 when I was speaking, today's 30% drop puts us right there.

Fed Independence…Yeah Right 

Trump's Warsh pick for Fed chair supposedly "eases Fed independence fears." What a joke. I've been telling you there's never been Fed independence. The Fed has always been a political animal serving whoever's in power.

What actually happened? The dollar rallied because traders think a Trump Fed pick means more accommodative policy. Same as it ever was.

Options Don't Lie

While everyone's acting shocked, the options flow told this story yesterday. We saw desperate call spreads - traders forced to go 25 points wide in GLD just to get any benefit because skew had completely flattened.

When you see traders pushed into those inefficient structures, the squeeze is done. The mechanism driving prices higher had broken down.

This wasn't manipulation. This was pure market mechanics. When leverage gets extreme, and the gamma driver disappears, gravity takes over fast.

Now What

We're seeing what real price discovery looks like without the gamma squeeze. This leverage needs to fully clear out before any real bottom forms.

The dollar's strength isn't just about Warsh. It's the unwinding of leveraged bets against the greenback. When that credit gets marked to market, dollar demand spikes.

The Lesson

Theory has to guide your trading. Yesterday's options flow gave us the framework to avoid today's massacre. When your edge disappears, you step aside.

The models work. I didn't make money yesterday, but I didn't lose 30% either.

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