The U.S. stock market finished up its worst week since August, when everybody though a rate hike was just around the corner

Substantial triple-digit losses across the board

The Dow Jones closed down 309 points - almost 4%

Similar percentage decline for the S&P 500

The NASDAQ dropped 111 points, over 4% decline for the week

The media is blaming this decline on oil prices, and yes, oil prices are weighing on some stocks

Some stocks benefit from lower oil prices - case in point: transportation

Dow Transport was weaker than any other index - down more than the markets on a percentage basis

The truth is that oil prices and stock prices are going down for the same reason

The reason is a slower growing global economy, including the U.S. economy, and the fact that the Fed is threatening to slow it down further with an interest rate hike

Some of biggest losers are not even in the stock market, but in the bond market

The high-yield bond market is getting obliterated

A chunk of the high yield market is energy companies

Two things are hurting them: the fear of rising interest rates and the slowing of the U.S. economy

We are heading for a recession, if we are not already in one

This does not bode well for the high-yield bond market, because in a recession these companies will have more trouble servicing their debt

The Fed's monetary policy of zero percent interest rates forced a lot of Americans into these high-yield bonds - people are hungry for yield

A lot of risky companies who did not have access to credit, were able to borrow all sorts of money because of this hunger for yield

This is the same thing that happened in the sub-prime market

Customers all over the world needed yield, and the mortgage market was where they got it

There was so much demand for mortgage debt on Wall Street it was easy for non-credit-worthy customers to get a loan

The same thing is happening in this high-yield market. Carl Icahn was on CNBC on Friday morning, referring to the present situation as a "power keg"

It is a powder keg that the Federal Reserve created and in theory they will light the match if they raise interest rates next week

In fact in my last podcast I mentioned that for the first time, the Fed might actually raise rates, and I received quite a few comments asking me if I was ready to admit that I was wrong

The Fed is trying to change the nature of a rate hike - alter the narrative away from normalization to a one-and-done scenario

Markets anticipate future events and they price them in, so the beginning of the tightening - "liftoff" I felt markets would look toward the eventual destination and start pricing that in.

None of the markets can handle that

So the Fed assured the markets that liftoff didn't matter because the first hike will be small and the trajectory will be very low

That's why I called it a trial balloon.  The Fed wanted to see how the markets would respond to a tiny, symbolic rate hike just to prove we can do it, and then a long period of time, before another one, if there is another one

Initially it looked as if the markets was buying the idea, but remember I kept saying there is time, and the markets could decline - in fact that is already happening

Maybe the Fed's trial balloon is not going to go over very well

We had a "Black Monday" in August prior the potential September rate hike

We have another Black Monday coming up - the technicals on the market look awful

We could have a huge decline on Monday, and you'd better believe the stock market is going to be high on the Fed's agenda

When the Fed called off the rate hike last time and we got a huge bounce in the stock market

The reason the Fed gave was weak global economic condiditons

 None of those problems have been solved and it can be argued that global economic conditions are weaker now than in August

What is worse is the U.S. economy. All of the forward-looking indicators are flashing recession