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The S&P 500 just dropped back inside a critical range. We broke above it late last week. Now we're crashing right back through 6950.

That level matters more than any earnings report hitting the tape tonight.

For seven weeks, the market traded in a 100-point range between 6850 and 6950. That consolidation built up massive gamma risk at these strikes. Market makers accumulated open interest the entire time.

Now that we've rolled back into the range, dealers have to sell into the selling. The math forces them to neutralize their directional exposure. Any additional sell-side pressure could trigger a quick drop to 6850.

In tonight's video, I break down what's happening:

• The VVX has exploded over the last two days. Volatility of the VIX itself is soaring, which means call buying in VIX options has surged. Whether it's speculation or hedging, neither interpretation is bullish.
• The advance-decline line was 50/50 when the S&P 500 was down 1%. That tells you the selling hasn't even started. Real sell-offs show higher correlation across stocks.
• Energy jumped 3.5% while AI names got pummeled. Broadcom AVGO is getting hit hard. NVIDIA NVDA is down 2%. Money is rotating into garbage because there's nothing else to buy.

Taiwan Semiconductor reports tomorrow morning. Goldman Sachs and Morgan Stanley follow. None of it changes the gamma problem sitting at 6950.

If we crack below 6883 in the SPX, we're going straight to the lower edge of the volatility box at 6850.

Video Length: 00:12:19

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