The U.S. stock market opened the first trading day of 2016 with a bang, but not the type of bang the bulls were hoping for

The Dow was down 276 points-it was down as much as 450 points in the last hour of trading

In fact,we opened down 300 and change and we hung around the down 350 - 400, in fact down 276, at the close was about the best level of the day

The NASDAQ closed down around 104

 The Dow Jones transports continues to get crushed - the weakest index on the day, down 156 points

We're now down more than 20% from last year's high, officially in bear market territory in the Dow Jones transportation - and don't blame this on weak oil prices because transports benefit from weak oil prices

This is all about weakness in the economy

A lot of the carnage was blamed on China because China was down 7% overnight, the worst first day of the year in the history of Chinese stocks

Supposedly the catalyst was a weaker than expected PMI in China - I don't believe for a second that the market was down 7% based on that report

First, there were two PMI's released, and one was slightly better than estimates and the one that was slightly below came in at 48.2 vs. expectation of 49

I think the Chinese market would have gone down regardless of the PMI numbers

The irony of it is that our own recently-released Chicago PMI on New Year's Eve and our number was way worse than the Chinese number

We were expecting 50, an improvement from 48.7 - instead we went down to 42.9

Bad economic news in China creates a terrible response, but bad economic news in the U.S. and no one even cares!

Why, because the Fed tells us everything is awesome and we can ignore all the evidence that the economy is far from awesome

Singapore reported a 5.7% increase in GDP for its 4th quarter, yet that number is being discounted

Yet no one wants to believe the good news from foreign governments, and no one believes bad news from the U.S. because the Fed's narrative is still out there

We got more bad economic news today: We got another PMI manufacturing number expected to be 52.8, it came in at 51.2

Even worse was the December ISM number - last month was 48.6 - it was expected to improve to 49.2-  instead, it dropped to 48.2

That's a bigger miss than China, yet no one here cared

Also, construction spending was a huge miss: the consensus was for a gain of .7; instead we lost .4

It gets worse, because last month the gain was expected to be a full point

The numbers that came out today were so bad that the Atlanta Fed, who recently revised down its Q4 GDP forecast from 1.9 to 1.3 a week or so ago and today they went down to .7

In my last podcast, I said that soon the Atlanta Fed is going to take their Q4 GDP estimate below 1 and that is just what they did

We have a lot more bad economic data that is going to come out between now and the end of the month when we get the first estimate of Q4 GDP and there's a pretty good chance that it will be negative, which is halfway to a recession

With a negative GDP in the 4th quarter, we have a better than 50/50 chance of having another negative GDP in the first quarter and that would put us officially in a recession

Just in time for the Fed to raise interest rates again - Not!

More people are coming to the same conclusion I have for a long time now, that the Fed had backed themselves into a corner and felt they had to raise rates regardless of the fact that the data didn't meet their criteria

I knew that if the Fed raised interest rates that they would regret it because they would have to reverse their direction based on the weak economy combined with a weak market

 Interestingly, there has only been one year ending in "5", going back to 1885 when the Dow Jones was down - that was in 2005

There hasn't been a year prior to a presidential election where the market was down since 1939, during the Great Depression

We're getting a lot of firsts, and of course, and today,