Wednesday, February 11, 2026

Don here…

The S&P 500 traded 1.3 million contracts today and went nowhere. That volume on a flat day should concern you.

Gamma risk in this market is primed to explode.

The S&P 500 has been grinding sideways in a tight range centered around 6,900 since mid-October. Every week the market sits in that range, open interest in SPX options keeps piling up.

That accumulated open interest is a snowball rolling downhill. The longer we stay flat, the larger it gets, and the more violent the eventual move becomes.

I am leaning bearish on the direction of that move. The reason comes down to sector rotation, and what I’m seeing right now is manic.

Tech has completely lost its leadership role. NVIDIA has done nothing since late July. Broadcom has flatlined since August. Amazon is down 10% year to date. Microsoft and Google are both getting killed.

So where is the money going? Anywhere that isn’t tech.

In tonight’s video, I walk through the gamma risk setup and the sector rotation that’s driving us toward a breaking point:

• ExxonMobil is up 27% year to date after going nowhere for three years. That move is not natural.
• Caterpillar is up 29% year to date. It suddenly became the hottest stock on the board after years of doing nothing.
• Consumer staples (XLP) are up almost 14% year to date. Toothpaste stocks are moving like growth names.
• Regional banks and financials, which had been carrying the market, are starting to roll over.
• The advance/decline line is stuck at 50/50 while the S&P sits inside a volatility box from 6,850 to 6,950.

Buying Caterpillar and Walmart to replace Google and Amazon is desperation. There are only two outcomes from here. Either tech comes roaring back immediately, or the S&P 500 breaks through this volatility box and the gamma unwind tears the market apart.

Pay close attention to the next two trading sessions. Things could get violent in a hurry.

Click here to watch me break down the gamma risk setup and the exact levels to watch

To your success,

Don Kaufman
Chief Market Strategist, TheoTRADE

P.S. When gamma unwinds, the move is violent and fast. Brandon’s Ghost Prints Console tracks where institutional pressure is stacking before the break happens. If you want to be positioned ahead of the next leg – not scrambling after it – join him tomorrow at 2PM ET to see how.

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Warm regards,

Don Kaufman

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