Mario Draghi of the ECB sent shockwaves through the foreign exchange and currency markets today

He didn't deliver the stimulus traders expected

The big question is, will Janet Yellen surprise the market by failing to raise rates?

The ECB did slightly lower interest rates, and extended QE if it will be needed

Draghi's goal is inflation

He equates 2% inflation to "price stability", when prices in Europe are stable now

The big divergence that everybody is trading on a tightening in the U.S. at the same time Europe continues to ease

The reality is more likely to be the reverse

If anything, the European recovery is just getting started, and the U.S. recession is just getting started

As a result of Draghi's decision to hold off on stimulus, the euro was up more than 3% on the day

The dollar was weak across the board

The stock market, including the DAX, fell accordingly

Both U.S. stocks and bonds experienced a selloff

Cheap money has been fueling rallies all over the world and when the ECB did not deliver it triggered a selloff in the U.S. assets

The Dow rallied over 2000 points off its September low based on rate hike expectations that did not materialize

We also got a key reversal in gold

Overnight it made a new low, but closed substantially above that level

The euro is still weak, it is just not as weak as the market expected

The best environment for gold when the weakest currency is the dollar

I wanted to address Janet Yellen's testimony today responding to questions

Yesterday, Yellen referred to Q4 GDP forecast consensus as 2-1/2%

She did not even realize that on that same day the Atlanta Fed reduced their forecast down to 1.4%

I think the real shocker will be that the Europea Q4 GDP will realize greater growth than the U.S.

Yellen was asked about Citibank's recent projection that the U.S. will experience a recession in 2016

Obviously, she can't agree with the projection, as this runs contrary to the Fed's rhetoric

Asked as a followup, what tools the Fed would use in the event we did experience a recession in 2016, Yellen responded that the Fed would all the tools it has always had

She said, if we did raise rates, then we would lower them

Plus, she said it could use the asset purchase program (QE) that "has worked so well in the past

If QE worked so well in the past, we would not experience a recession in 2016

You can't call QE a success until rates are normalized and the balance sheet shrinks back down to pre-crash levels

If the Fed finds that it has to launch QE4 in 2016 because it failed to reach "escape velocity"

How many QE's does the Fed have to initiate before it admits that it doesn't work, and is actually impossible to end without a great deal of pain?

This loss of credibility in the Fed will precipitate a dollar crisis

Anther thing that was ignored by Janet Yellen and the press was the six-year low in the ISM number

The market is focusing on the service sector, yet the most important jobs are the goods producing jobs

Lat month, we got a higher than expected jump in the non-manufacturing number:59.1

This month we wend all the way down to 55.9, which is dangerously close to contraction

If we get the service and the manufacturing sectors both in contraction, that will be a total recession, supporting Citibank's 65% probability forecast may look optimistic

Since 2016 is an election year, a recession will not bode well for the Democrats' economic success narrative