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Stock Market: Drop It Like It's Hot

|Includes: AAPL, GOOG, The United States Oil ETF, LP (USO)

After an impressive recovery yesterday off the lows, the markets are getting slammed once again as Europe continues to take the wrong steps in the short run to try and prop up their markets.  After Germany banned some naked short selling on Wednesday causing a panic drop in the market, word on the street is that Europe the rest of Europe is doing the same thing.  It is not that naked short selling should be allowed, it is more the random move which suggests European officials are in panic mode.  If they are panicking, the global markets feel things may be even worse off than once thought.  Anything done to the markets needs to be choreographed for weeks in advance.  The U.S. Federal Reserve has been a master of this.  Europe has yet to catch on.

There are not many sectors in the markets that are not getting hit today.  Commodities are being crushed as demand fear is dropping oil, United States Oil Fund LP (NYSE:USO) by 4%.  Just in the last few weeks, oil is down nearly 25%.  It is hard to remember a time when oil collapsed this much on a percentage basis in such a short term.  Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) are both down nearly 2.5% on the day. Copper, steel and other commodity plays are also getting hit sharply.

The issue with demand is not just a commodity problem.  Fear from Europe is causing demand fears in everything.  Technology has been pounded of late on this worry as well.  Apple Inc. (NASDAQ:AAPL) is -$7.70 (-3.10%) at $240.64.  Apple has major support at $235.00, a key gap fill.  Other major technology stocks continue to be crushed including Google Inc. (NASDAQ:GOOG).  Google has support here at $480.00 and if it closes below that, it may see $460.00.

Gareth Soloway
Chief Market Strategist