The S&P 500 had its worst weekly loss since the week ended August 21, 2015, and the second worst trading week since March of 2012. The DJIA lost 310 points on Friday to close at 17,265 while the S&P 500 lost nearly 40 points to close at 2,012. The Nasdaq was lower by 112 points to finish at 4,933 and the Russell 2000 lost 25 points to close at 1,124.

For the week, the DJIA was down 3.27% while the S&P lost 3.87%. The Nasdaq was lower by 4.11% and the Russell 2000 was down 5.05%.

The S&P 500 Trust Series ETF(SPY) - Get Report volume traded over 200 million shares on Friday.

So, what triggered this huge selling event on Friday? There will be many opinions as to what caused the selloff, but, China's Central Bank signaled on Friday its intention to loosen Yuan's peg once again to the U.S. dollar. China says it will link the yuan to a basket of currencies. This simply means that China is allied with the Euro and Janet Yellen and the Federal Reserve are on their own if they raise interest rates. In September, Janet Yellen was threatened by the IMF and others not to raise interest rates. This time the threat is coming from China. This may be a possible game-changer for the Fed and it may not raise rates after all.

In addition, there appears to be the panic in the junk bond market that has finally started to appear on everyone's radar screens. The SPDR Barclays High Yield Bond ETF(JNK) - Get Report was decimated this week to the tune of down 3.96% and now down 12.74% for 2015. This, coupled with the fact that there is over $9 trillion in dollar denominated emerging market debt and over $5 trillion in energy related debt, you can understand the panic if Yellen raises interest rates.

Attached you will find daily chart of the SPDR Barclays High Yield Bond ETF, which clearly shows a bearish trend and near-panic selloff on Friday.

In the meantime, volatility is a common theme as the markets close out 2015 and welcome 2016. Expect that to continue. 

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.