* Janet Yellen was up on the Hill today for the first of her two-day testimony before Congress

* Remember I said the only way that Janet Yellen could stop the market from falling is to admit that the Fed will alter its 4-rate-hike trajectory for 2016, and she didn't do that

* As a result, the stock market failed to sustain its early morning gains; the Dow was up better than 100 points - closed near the low of the day down 99.64

* The NASDAQ, which was up not quite 100 points earlier in the day closed on the low of the day, up only about 14 points on the day

* It was the opposite for gold; gold was actually down this morning before Yellen spoke, down around 1180-ish on the lows; we closed up $8 on the high of the day - $1197 - knocking on the door of $1200

* The gold stocks were clobbered this morning and they closed positive; the gold index was up about 2-2-1/2% - it was down 4% earlier when gold was down but by the stock market opened gold wasn't down $8 anymore, it was down about $2 or $3, yet gold stocks were clobbered

* Maybe it's still the overhang from Goldman Sachs coming out yesterday and predicting that gold would fall below $1000/oz in 2016

* That probably means that Goldman Sachs is short a bunch of gold and they want to cover, or they just need to buy and they're trying to convince the muppets who actually pay attention to what they say, to sell their gold to them

* Janet Yellen continued with the narrative that everything is O.K. - the economy is fine, the recovery is on track, yes, she acknowledged some headwinds: growth was a little bit slower at the end of last year, but no big deal

* There are some problems overseas that they're monitoring , there are some financial tightening: overseas markets are weak, domestic markets are weak, yes the Fed is paying attention to all that

* But so far, from their perspective, everything is on track, the recovery is moving along, the labor market is strong, despite the fact that there is no improvement in labor force participation, there's no improvement in the part-time workers who want full-time work, there's no real wage growth other than the bump from the minimum wage hike

* But despite all that, Janet Yellen still maintains that everything looks good, that we will overcome these headwinds - this is her most likely scenario

* She did acknowledge that monetary policy is not fixed, that the trajectory is not set in stone, that the Fed will monitor incoming data, and if the data evolves in a manner they don't expect, then yes, they might not raise interest rates as much as they believe they're going to raise them

* As far as the Fed is concerned, based on the data they have now, their most likely scenario is that everything is fine, which means the market is going to keep falling

* It's almost ironic that Yellen would say, "The markets are weak, and if they stay weak then we might have to adjust our monetary policy" - that means the markets are going to stay weak!

* The only way to stop the markets from falling is for the markets to know that rates aren't going up

* I think it's more than just the absence of rate hikes: this market needs more QE

* The Fed dialed back the dosage and the market requires it now, or it will start going down

* I was watching a great interview with Jim Grant today on CNBC and he was saying all the things I am saying: he says we're already in a recession; he's confident that it began at the end of last year and he thinks the Fed is going to go back to zero and do more QE, and that they might go negative

* Janet Yellen was asked about negative rates in her testimony, apparently the Fed had considered it back in 2010 and they rejected it and she was asked if negative interest rates are even legal

* Yellen said to her knowledge there is nothing legally preventing the Fed from going ...

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