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When Will It End?

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As the stock market settles at its lowest level since September 2006 – and oil spikes to a new high of $140 – traders are finding it difficult as ever to come up with reasons to buy. Tech, aerospace, banking, brokers, industrials, consumer products. Nothing seems to be working.





But as precarious as it looks out there, Fast Money’s Jon Najarian doesn’t see blood on the streets just yet. In fact, he said on Thursday’s Closing Bell that he’s “surprised” that this aggressive selloff didn't breed more of a panic. Based on the options action he’s seeing, traders seem to be hesitant to go into the third quarter too short. Volatility hasn’t reached a point of capitulation either, Najarian said.


As the stock market settles at its lowest level since September 2006 – and oil spikes to a new high of $140 – traders are finding it difficult as ever to come up with reasons to buy. Tech, aerospace, banking, brokers, industrials, consumer products. Nothing seems to be working.

So why the ugliness in stocks? Simple. Banks and oil. The downgrades started it, but $140 crude was the punch in the gut. Oil at these levels is simply too much of a headwind for most anything to work.

Except, maybe, the railroad stocks. Joe Terranova, another Fast Money contributor and experienced oil trader, said that the spike in crude has made him more comfortable owning rails like Burlington Northern . But the bottom line, as far as Terranovais concerned, is that now is the time to play defense and diversify.

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Trader disclosure: On June 26, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS); Finerman's Firm Owns (MO), (MSFT), (PM), (SUN), (TSO), (VLO), (AXP), (DVA); Finerman's Firm Owns SPX Index Puts; Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM); Najarian Owns (AAPL), (ANR), (CHK), (RIMM), (TSO), (XLF); Najarian Owns (MER) Puts; Najarian Owns (NUE) Calls, (QID) Calls, (SLB) Calls, (YHOO) Calls; Terranova Owns (BNI), (CME), (FXC), (LUV), (GOOG), (INTC), (IYT), (XLF), (SU), (YHOO), (FCX); Terranova Owns Dollar Index Futures

Terranova is chief alternatives strategist at Phoenix Investment Partners;; Phoenix Investment Partners Ltd. Owns (RWX), (DBC), (DBV), (IGE), (AAI), (ALK), (AMR,) (APA), BP plc, British Airways plc, (CHK), (CVX), (COP), (CAL), (DAL), ENI SPA, (XOM), Gazprom, (HA), (HES), (HOC), (HSE), (JBLU), Lukoil, (MRO), (MUR), (OXY), Petrobras Intl Fin, Petro-Canada, (PBR), Petroleos De Venezuela, (QAN), (RJET), Royal Dutch Shell plc A Shares, (SKYW), (LUV,) (SU), (TSO), Texaco Capital, Total SA, (UAUA), (LCC), (VLO)