What a week for global stock markets, but in particular, the U.S. stock market, which had its worst week in 4 years

The Dow Jones down better than 1,000 points - over 10% from its peak puts it in official correction territory

One-third of the stocks in the S&P 500 are already down 20% from their highs

The Dow lost more than half of the 1,000 points today - 530 points, which is the 9th biggest point decline ever

This is on top of the 350 points dropped on Thursday

Thursday we broke below some key technical levels so Friday's drop was inevitable

There could be a bigger one looming for Monday

This is reminiscent of the weekend before Black Monday back in 1987

We are only about 300 points above the lows from October last year when St. Louis Fed President James Bullard saved the market and sent the Dow up 2,000 points

This time he is throwing the market an anchor

He still indicates the Fed is undecided

What data over the next couple of weeks could be that significant?

The Fed does not want to admit that they can't raise rates

When is the Fed going to blink?

Valuations are extremely high, and the Fed is about to go from supporting the market to leaning against it

The economy is decelerating

I think the market is going to surrender all the gains it has made since March of 2009

None of those gains have been real - they did not come from increased production or a genuine increase in corporate earnings, it was all Fed engineering

The market has gained no ground since QE was suspended

If the market goes down on Monday, what is the Fed going to do?

The Fed needs an excuse not to raise rates

The drop is not because of China

The problem in China and in the emerging markets is caused by the perception that U.S. Fed is going to raise rates

The markets want to blame the market correction on China but that is not why our market had a correction

Emerging market currencies are taking the brunt of the selling by those who are expecting a Fed rate hike

The euro is very strong today, and the dollar index is declining

The euro is going to go on a big move, especially if the Fed caves

Gold is up $80 in the last 2 weeks

What happened to the theory that gold will collapse below 1000?

Two weeks ago hedge funds were for the first time net short gold

How is that trade working out for them now?

A lot of people are trapped short the euro and short gold

Now pro-dollar bets are pressing smaller currencies

This is the last throes of the dollar bull, based on the rate hikes that aren't going to happen

At the end of the 6 or 7 year journey, there can't be a rate hike

If the Fed actually raises rates, they lose credibility because they will have to immediately reverse course

If they do not raise rates, they can say caution is needed because of another dip in the recession

This way they don't have to admit that the policy was a failure

The only economic data that came out today was the August Manufacturing PMI number - expected to improve over last month

It dropped again to 52.9 - the lowest level since October 2013, and the biggest miss in 2 years

If the Fed is truly data dependent it would have already admitted that it can't raise rates

At the end of 2014, I predicted that 2015 would be a much weaker economy than forecasted

I was right about that

I thought by now the Fed would have admitted that the economy is too weak for a rate hike

But the Fed just keeps talking about a potential rate hike as though it were a real possibility

This is a very dangerous game

The Fed is going to have to eventually go to QE4, but in the long term, the market actually needs tight money, but that is going to lead to a much bigger financial crisis than the one we had in 2008

Bank failures, defaults - not only on private debt but also treasuries

That would ultimately be better than the massive inflation we will suffer

The Fed will not have the luxury of holding bonds to maturity if it n...