The phrase, ‘the bigger they are, the harder they fall,’ is a term characterizing any event which is humungous and having a negative effect which is incomparable to none. The past few days had seen the market’s slump in a huge slide smashing one support level after another as investors could not keep up to the negativity surrounding the vibes from the euro zone area. Even though the US data showed signs of gaining recovery, the critical conditions of the Eurozone is having a major effect on the markets at the moment. The pressure is on the stocks as well as the commodity markets. Gold has been gaining bearish momentum in the past couple of days as the euro continues to weaken against the greenback. The precious metal has seen the worst ever slump in the recent memory as investors resorted to diminish their investments in gold against the dollar gaining ground.

Stocks sold off sharply, as the euro fell below the significantly important level of 1.30 levels. US stock futures were slightly lower and oil, which had seen a dramatic drop in the initial hours of the Wednesday’s trading session, stabilized as the clock ticked on, after crude oil dropped more than 5% initially.

Fitch’s downgrade after the market close of five major European banks is likely to add to the negative vibes in the market. Traders were relieved this morning when the Chinese PMI data increased from 47.7 to 49 which stabilized the volatile markets upto a certain level. However, Thursday will be a busy day for the market watchers with jobless claim and PPI to be released from the US in the evening. Others data including the Philadelphia Fed Survey (US) and Industrial Production (US) are also on investors watch list this evening.

Investors opine that if the much anticipated Santa rally does not materialize, the only catalyst would be for some positive developments out of Europe and that does not look like it’s happening at the moment. The markets are moving towards the un-acclaimed negative direction with European leaders making the kinds of comments the market does not want to hear right now.

The fierce sell off in commodities particularly gold and crude oil was sparked by disappointment that the Fed did not provide any new promise of QE3 after its meeting on Tuesday. Traders widely anticipated that the Fed would do something because of the high level of concern about the contagion effects from Europe. The price of commodities especially gold has seen a dramatic slide in the past couple of days. The economic indicators being released later on in the day are believed to have major effects as the global investors look for some positivity from the USA. Watch this space for updates!