The U.S. stock market finished out this holiday-shortened week on an upnote with the Dow Jones up just over 100 points

This was the best week the market has had since March

The dollar was softer on the week; the euro ended solidly above 113

Gold was under pressure throughout the day but closed only off about $3.00

Gold stocks earlier this morning were at the lowest I've seen in this cycle but then had a sharp reversal finishing much stronger on the day

The markets are looking forward to no rate hike in September

Michigan Consumer Sentiment Numbers may have been the catalyst to turn the market

They were looking for 91 - slight below last month; instead we got 85.7 - a huge miss

This is the biggest miss in the history of the index

The bigger number was the Wholesale Trade Number, which was expected to reflect inventories to rise .3%

Instead, inventories declined by .1%

This will notch a little off of Q3 GDP

More importantly, inventories went down, but sales also declined by .3%

This means the inventory to sales ratio rose again

It is not at the highest it has been since the 2008 financial crisis

This level has only existed twice in the last 15 years and both of those times, the economy was in recession

Another interesting chart is inventory to sales in the Auto sector

Auto inventory to sales level has risen to 1.73% - the highest since 2009

Today's inventory to sales ratio is even higher than the recession of 2001

This is a sign that the Auto bubble is bursting

If the Fed were going to raise interest rates in September, wouldn't we already know by now?

The longer the Fed waits to raise rates, the less likely is is to do it

If the Fed does rates and then has to go back to zero, it will look like the Fed was wrong about the economy

It would be better now to keep rates at zero, indicating they understand the weakness in the economy

The other risk of raising rates, and weakening the economy is that it may become evident that the Fed can never raise rates

The driving force behind the dollar rally is expectation of normalization of rates

The Fed has severed the legs of the economy and higher rates will expose this

The Fed has plenty of excuses not to raise rates, but now that they started zero percent interest rates, they will not be able to stop

The balance sheet has not shrunk at all

There is no way out

How can people think that we can keep interest rates this low for this long and not have problems?

Artificially low interest rates causes mis-allocation of resources

Those mistakes are corrected when interest rates go up

The next economic downturn is going to leave the Fed with no other recourse than QE

Fiscal stimulus will roll out during the election year to cover the bigger deficits caused by Keynesian stimulus package

Also the emerging markets are just starting to unload U.S. Treasuries because they no longer need them to keep their currencies from rising

When they realize that the dollar has peaked and a new bear market has begun, the Fed will have to not only stimulate the economy and monetize the growing deficit, they will also have to monetize the treasuries that are being sold by foreign central banks

QE4 for will be bigger than QE1, QE2 or QE3

The question is, when are people going to figure this out?

When is the dialogue going to turn from when will the Fed raise rates to how big is the next stimulus package be and how soon will it be here?