Image Source: Pixabay

The S&P dropped 1% today and hit the lower edge of the expected move. Social media is screaming about a market crash.

But the VIX barely moved. Neither did the VVIX.

Volatility is looking at this "selloff" and saying nothing's happening.

The advanced decline line tells you why. We're sitting at 50-50 advancers to decliners. That's not selling. That's rotation.

Look at what's actually happening under the surface:

• Apple AAPL down just 1% while the Nasdaq dropped almost 2%
• Microsoft MSFT finished basically flat on a supposedly brutal day
• Amazon AMZN lost only half a percent when it should be leading lower
• Nvidia NVDA down 4% and Broadcom AVGO down 4.5% carrying all the damage
• Oracle ORCL continuing its collapse from $340 to $178 in just weeks

Meanwhile, money is flooding into the usual suspects. Energy caught a bid. Financials finished unchanged. Retail is attracting capital. Traders aren't panicking. They're just rotating from AI names into sectors that lagged all year.

Here's what concerns me. We haven't even begun to sell. Tesla hit an all-time high yesterday morning before reversing slightly. Apple sits just a few percentage points from its peak. The market spent two weeks doing absolutely nothing before this move lower.

Real selling has higher degrees of correlation. When financials crack, when Walmart breaks down, when everything falls together, then you'll know it's on.

The triple witch arrives Friday with $82 of expected movement still priced in. But next week's options are already pricing holiday mode at 16% implied volatility. The market thinks the storm passes by Christmas.

I'm watching the advanced decline line. If correlation kicks in and everything starts falling together, the character of this tape changes completely. Until then, this is just end of year rotation dressed up as a selloff.

Video Length: 00:13:10

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