As I said in my last podcast, when the the Federal Reserve issued its press release yesterday at 2:00pm, Janet Yellen did not give the markets they were hoping for; in a way, it was almost as if she threw them an anchor instead, because the Dow Jones ended up falling about 200 points as a result of the disappointing statement

The statement was dovish, but it wasn't dovish enough, and even though the Dow recovered about half those gains, I think the market is still on the defensive, given the fact that Janet Yellen still did not veer from the projected rate hike path, even though the Fed went out of its way to say that the tightening would be very gradual and that rates would still be low for a long time

And the Fed will continue reinvesting all all the maturing bonds, so the balance sheet will not shrink at all

They will continue to reinvest interest and principal payments, meaning the balance sheet will continue to grow, so it's still QE, just a slimmed down version

But I do expect full-blown QE4 to come before the November election

I do believe that this is the first step in a reversal of policy because Janet Yellen did acknowledge that economic growth slowed last year

In fact, it slowed more at the end of the year, as we will see when we get the first look at the Q4 GDP tomorrow; I think the economic slow-down is continuing in 2016

The Fed also said that they were monitoring the financial and global markets and will take in consideration the effects that these might have on economic growth, inflation and employment

Obviously, the effects on economic growth are going to be negative - it's the reverse wealth effect

The Fed puts a lot of stock in the wealth effect, but it's a two-edge sword

The Fed statement also mentioned that they are still targeting 2% inflation but that they're not quite there, and expressed concern that they might not meet that goal

To me, acknowledging the economy is slowing, going out of their way to mention that they are monitoring the global economy is an easing from their rhetoric

The Fed is going to have to do a lot more than that subtle suggestion

I think it is enough to turn the dollar; it has been weakening across the board today

Oil prices have moved up a bit

Gold stocks have actually done a little bit better than gold - gold and silver were both hit today: gold was down about $10/11, silver was down about .30

There was a huge sell order that came in early in the morning and just knocked the markets down in about a minute, which has been typical

It looked like the metal was poised to continue to move higher

We'll see what happens tomorrow when we get the GDP

But one of the reasons it looked like today should have been a big day for gold was the economic news that came out early this morning on December Durable Goods

They were looking for a +.2 increase, following a 0% gain in November

Instead, first they revised the November's number to -.5 and then, instead of improving, we dropped 5.1 - Huge decline!

You have to go back to the '08 financial crisis to find a Durable Goods that bad

It gets worse when you look at the details

Strip out transportation: they were looking for zero, instead we got -1.2

On top of that, they took last month's -.1 and made it -.5

The worst one is Core Capital Goods: last month was down .4 and we got -4.3

Year-over-year Capital Goods is down 7.5%

So, given this number and the Fed's statement yesterday, I expected gold to build on its momentum, but for that big sell order that happened early in the morning

The gold stocks held up today, despite the big drop in gold

I expect a rally tomorrow if we get a weak GDP number, and now a lot of people are looking for a weak number; the consensus is now down to about 1%

Whatever number we get, it will be revised even lower and after the final revision I would expect Q4 to be a negative number and the the beginning of a recession