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Seek Protection, The Selling Isn’t Over: Pros

Bears have been counting on the crisis in Europe to take a turn for the worse and on Wednesday it appears they may have gotten their wish.

The S&P broke below the psychologically important 1300 in mid-day trade as investors ran for the exits due to a growing belief that Greece would exit the European Union.

Concerns intensified dramatically after euro zone officials agreed that each EU member nation must prepare an individual contingency plan in the eventuality that Greece decides to leave the single currency area.

On the news, the euro traded below $1.2588, its lowest level since July 2010.

“I think this is the beginning of the end of the union,” says trader Steve Cortes, giving voice to a growing belief that Greece may just be a road map for other nations to also exit.

The great concern for investors isn't the exit itself, Greece is a relatively small economy, but rather the uncertainty and potential ripple. Skeptics say it may be much wider reaching than anticipated.

Trader Steve Cortes is among those skeptics; he the ripple sends the S&P sharply lower. "The last time the euro was at these levels, the the S&P was at 1100," he says. "That's a massive divergence between the foreign exchange markets and the US stock markets and I'm betting that the currency traders are right."

With so much uncertainty, trader Joe Terranova says if you must play the market, “Keep the strategy simple. Make binary decisions."

And as worrisome as Greece may be, Terranova says there are other serious negatives in the market including the JPMorgan $2 billion trading loss, the Facebook IPO debacle and the fiscal cliff.

In other words, even if the EU is able to 'kick the can down the road' these other woes could still spook the Street.

All told, “It’s time seek protection,” Terranova says. There’s a lot of uncertainty and limited upside catalysts.”

Terranova suggests getting protection with options or rotating into best of breed stocks such as Apple, McDonald’s and Starbucks.

What do you think? We want to know!

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Posted by CNBC's Lee Brodie

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Trader disclosure: On May 23, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long PNC; Joe Terranova is long SBUX; Joe Terranova is long SJM; Joe Terranova is long UPL; Joe Terranova is long LQD; Joe Terranova is long AAPL; Joe Terranova is long CNX; Joe Terranova is short JUNE MINI S&P FUTURES; Steve Cortes is long DEO; Steve Cortes is long CLX; Steve Cortes is long GOOG; Steve Cortes is short XHB; Steve Cortes is short COH; Steve Cortes is short JWN; Steve Cortes is short EURO CURRENCY

For Dennis Gartman
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Michael Widner
Stifel, Nicolaus & Company, Inc. makes a market in the securities of D. R. Horton, Inc: DHI
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