Stocks ended in negative territory with Wall Street staging yet another late-day reversal on Wednesday.
However, this time the bears seized control of the market and selling prevailed after news suggested China was reassessing its bond holdings in Europe.
The developments spooked an already jittery Wall Street and by the close the Dow had slipped below 10,000, as investors sold strength in this volatile rumor-driven market.
What happened to the bulls?
I think the sell-off was driven by black box ‘seek and destroy’ trading, says Joe Terranova. That’s a program that looks for weakness in the market and then aggravates it.
Also Microsoft CEO Jeff Ballmer made comments that he was getting nervous about Europe, adds Jon Najarian. That increased jitters too. And reports hit that said the DOJ might be preparing an antitrust probe into Apple.
It doesn’t take much to trigger worry in this market, adds Tim Seymour. Also we’re in a holiday week.
Smart money is in a defensive position right now, adds Terranova. That’s how to position – be defensive.
-------
CAN EURO BE FIXED
If the action in Europe’s currency is any indication, things don’t look so good for the beleaguered region.
On Wednesday, the euro extended losses against a basket of currencies including the dollar. It’s now trading at a fresh 4-year low against the greenback - below $1.22 a level thought to be support.
What must you know?
There is no way that this ends the right way for the Euro, says widely followed investor Mark Fisher on Squawk Box. In the United States it is all for one and one for all. Over there how can you go and tell the German people that work 40 to 50 hours a week they have to bailout another culture?
I think Europe has to fix this problem because it will cost too much to let it go, counters CNBC’s senior economics reporter Steve Liesman. Imagine coming to work and a German retailer has to rip up a contract with an Italian supplier because the EU broke apart.
What’s the trade?
I think the trade is to get into commodities, says Joe Terranova. It seems to me the selling in this space triggered by euro weakness is done. Commodities have likely bottomed.
I agree with Joe, echoes Tim Seymour. And emerging market should continue to grow which is another bullish factor for commodities.
-------
TOPPING THE TAPE: CITIGROUP
Citigroup topped the tape on Wednesday after Oppenheimer upgraded the stock to Outperform saying shares are attractively priced after the recent pullback. It’s the third positive note out on Citi in a week.
What’s the trade?
I like Citi right here for a pop, says Jon Najarian. But it’s a trade.
Reports in the FT suggest Qatar is looking at buying a portion of the US government's 27% stake in Citigroup, reveals Anthony Scaramucci of Skybridge of the Fast Money Halftime Report. I think it’s a sign of the bottom. Bright days could be ahead for this company. (For the record, Skybridge acquired a hedge fund business Citigroup earlier in the year.)
Once the US government gets out I think the Citi shares go much higher, speculates Joe Terranova
______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment but not have it published on our website send those e-mails to fastmoney@cnbc.com.
CNBC.com with wires
