And we are in danger of it burning out of control through the entire US economy.

Stock markets closed last week mixed, with the Dow and the S&P 500 up a bit, and the NASDAQ and the Russell 2000 down. Some analysts say the problems that seemed to be brewing, particularly in the NASDAQ, have passed since there really wasn't any significant follow-through after the NASDAQ dipped into correction territory last Tuesday. But Peter says he doesn't think the bulls are out of the woods yet.

I still think the charts look like there is a lot of potential that we can see a bigger decline. Of course, you've got the backstop of the Federal Reserve. In fact, it's only because the Fed is there that the market didn't have a bigger drop this week. The reason we didn't have more follow-through is because people expect the Fed to come to the rescue. In fact, if the Fed wasn't there, the market never would have been at the levels that it just dropped from."