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Chapter seven marks a turning point in the novel because it is at this point that Gatsby sees his dream of getting Daisy finally disappearing from his reach. In this chapter, Gatsby gets into a fight with Tom in which Tom exposes the truth about Gatsby to Daisy. Additionally, on the way home from their hotel in NYC Daisy kills Myrtle while driving back to East Egg with Gatsby. It is at the end of this chapter that Gatsby realizes that the life that he has created for himself in order to impress Daisy is "nothing" without Daisy. Therefore, he is looking at the "nothing" that will become of the relationship that he was hoping for with Daisy.
Nick has just seen Daisy and Tom through a window, conspiring over cold chicken. The vignette is one of domestic intimacy: the two are neither happy nor unhappy but unmistakably intimate to Nick's eyes. Daisy ran over and killed Myrtle, but the couple has pulled together as one, Myrtle and Gatsby no longer important.
When Nick returns to the Buchanan driveway, he sees Gatsby still waiting to see if Daisy needs him. Nick tells him he should go to sleep, but Gatsby says he will watch over Daisy until she is in bed. Nick leaves him, feeling he is intruding on a "sacred" ritual. Nick notes Gatsby is watching over nothing because Nick fully understands the futility of Gatsby's hope that Daisy will choose him at this point. The scene in the kitchen shows yet again, as the Plaza episode did, that Tom has won. Daisy won't run off with Gatsby, and she doesn't need Gatsby to protect her from Tom. Gatsby's dream of Daisy has evaporated, and all Gatsby is watching over is his own illusion.
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