Swollen Gums Tuesday

UPDATE 11:12am EDT: Boy, did I have a lousy night – after that butcher of a dentist strapped me to his torture bench for almost three hours (two crowns had to be replaced) I have been popping pain killers like candy and my lower jaw is a bit swollen. No worries – I’m going to be a man about it but forgive me if I’m a bit out of it today – so let’s get to the charts right away:

I’m currently in neutral mode as the wave count looks incomplete – I only threw the green scenario in as a courtesy – personally I think it’s way too early for a deep retracement at this very stage. However, if we breach 888.70 today or tomorrow then chances are the current Intermediate is complete. But this is not where you should jump into a boat load of short positions.

Orange and Blue look more likely and they only differ from each other in terms of the degree of the drop. Soilent Orange assumes that we are in the midst of Minor three and are sub dividing. The first stop point here should be the 930 region. Soilent Blue counts this drop as Minor 4 of Intermediate (C) of Primary wave {2}.

Gold has become the top candidate for the coveted ‘Theta Burner of The Month Award’. I’m glad I’m now sitting on a butterfly here and not bare ass puts – as May OPEX approaches that could get ugly very quickly.

And here’s our culprit which has given commodities their recent boost. If this thing drops though 83.2 in the next few days it could get very ugly for the old buck.

If you look at USD/JPY (Dollar against Yen) – which Fujisan bought last night – it’s starting look like they are trying to get that old carry trade going again. The chart above is the inverse view – the FXY. I am keeping a watchful eye on this situation as a drop below the 100 mark is psychologically important and might trigger a larger drop in the Yen. This in turn might revive some of those currency lending games that were rampant throughout the past 8 years or so – if only temporarily.

Alright – I’m posting this now so you rats have something to talk about and will return with more data as I find it.

UPDATE 12:05pm EDT: Vino (a new member) alerts us to some suspicious developments in open interest in the SPY options chain:

The P/C right now is about 1.2 and the highlighted sections speak for themselves. I still think that it’s a bit early here for a large drop but it appears clear that a large portion of traders expect a meaningful retracement by OPEX week.

Then again – remember the old aphorisms: What everyone knows is not worth knowing. Or: What is obvious to most traders in many cases is obviously wrong.

Now I’m going to try to chew my breakfast somehow – in the meantime it would be great if you guys could tone down the banter and force some intelligent discourse about the option chain above out of your deseased rat brains.