Along with stocks, oil plunged on Thursday as panic selling swept across the markets. Commodity stocks could be heading for the biggest annual decline since 2001.
The story of global growth that brought this bull market to a peak one year ago Thursday has become completely unwound, adds Dylan Ratigan.
For insights we turn to celebrated commodity trader Dennis Gartman, author of The Gartman Letter.
"This is a cascading crash,” says Gartman. “It will stop when confidence has been returned to the market. I don’t want to see more government involvement but they might have to get into the market and start buying index futures.”
Selling begets selling
Electronic exchanges have outpaced the ability of regulators to put a stop to momentum, adds Zach Karabell. I think the government needs to just stop the market.
Gartman doesn’t see that happening. “They’ve done it before but what kind of signal would that send to the public at large? Perhaps it might work on Columbus Day because at least the banks are closed that day.”
I think we need some sort of governance, adds Jon Najarian, to create more one-on-one communication. That’s what’s missing.
How to trade?
Gartman joined the Fast Money crew on Wednesday and explained how he's currently trading. “I’ve increased the size of my positions a little bit but everything I do is absolutely hedged,” says Gartman. “I’m still buyingbank stocks but I’m hedging it by being short the stock market. "
"Also, I’m buying the CME and ICE because of the Fast Money interview with Craig Donohue but I’m hedging it by being short the stock market.”
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Trader disclosure: On Oct.9, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns, (AAPL), (EOG), (EXM), (FTO), (FCX), (GS), (MA), (NOV), (POT), (X), (VLO); Jon Najarian Owns C preferred, WFC preferred, JPM preferred; Karabell Owns (MS), (JPM), (IBM), (AAPL), (GOOG), (FCX), (GLD), (CAT), (AGU); Seymour Owns (MER), (F), (BX) (GE)
