Continuation of parallel between this rally and April

I covered the Techincals in a previous post : October Looks Alot Like April
Lets look at each of these segments.  The formation of this up leg is very similar however in my opinion weaker than the previous one in April.  The notable sections are the second from the top.  These are sideways action consolidation paving the way for another push top the upside.  Which we have got today.  Well one thing that caught my eyes was April 16th..... The massive red candle signalled that something was amiss in the markets.  There was a final push to the upside and..... May flash crash.

So what is so important about April 16th??  It was options expiration day.  What is happening this friday in the exact same place in this up leg?  Options expiration (October 15th).

Coincidence ?  Probably however, it is something to be aware of.  A reason I believe friday will play out exactly the same way is that it appears that people are actually starting to believe the underlying fundamentals of the economy are better.  When people start believing that, smart money exits the market.  Remember that people that write this options do not want them to be exercised.  Which means that if everyone is optimistic, a collapse of the market on options expiration day catches many of the people playing it close to the strike place out of position.


Remember that for an economy to be healthy people require jobs.  The job situation has been stagnant, and September's employment situation resulted in 96,000 less jobs. 


Here is an article from bloomberg that baffles me : Fed Considers Raising Inflation Expectations To Boost Economy

"Federal Reserve policy makers may want Americans to expect inflation to accelerate in the future so they spend more of their money now."

I understand the economic principle behind this, however it is ridiculous.  There are millions of people getting homes foreclosed and large percentage of the population unemployed, discouraged, or underemployed, and the government wants to cause price inflation such that people will start to spend money they don't have. 


The real issue is that the government is stuck with no where to go.  My solution has and will continue to be bailout the population with a specified amount of money.  This money has to go towards debt if the receiver has debt.  The money will flow back to the bankers however it will reduce their profits as they are not skimming off the people at the margin.  People will again start to spend money because their interest payments are not eating up all disposable income.

It is impossible to get through this by maintain corporate profits.  The top 1% of the western world requires pay cut, then and only then will the situation become sustainable.