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'Fast Money' Recap: Market Overreacts

NEW YORK ( TheStreet) -- The markets plunged Wednesday on disappointing economic data.

The Dow Jones Industrial Average dropped 178.84, or 1.48%, to 11,897.27. The S&P 500 fell 22.4, or 1.74%, to 1265.43. The Nasdaq slid 47.26, or 1.76%, to 2631.46.

Tim Seymour said on CNBC's "Fast Money" TV show that market overreacted to the eurozone debt situation and Greece, where the prime minister was desperately trying to deal with a crucial austerity bill amid violent protests.

Seymour said the markets are starting to see the VIX expand, making it a dangerous place to trade. He said it was surprising to see the markets respond so dramatically to today's events in Europe as if they were being heard for the first time.

For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."

3 Stocks I Saw on TV

Steve Grasso reminded the panel of an earlier bearish signal he made that the selloff would be coming when the S&P reached 1291.

Guy Adami said the market needs to hold at 1249.05, but he doesn't think it will and believes a selloff of a "larger magnitude is on the horizon."

With the VIX moving above 20, Karen Finerman sensed a feeling of panic in the market, replacing complacent selling during the first part of the month.

Seymour said it's not fair that stocks are being priced as if there were going to be a "complete implosion of the financial system."

Brian Kelly said the catalysts for today's selloff was the downgrade of the French banks with exposure to Greece's intractable debt problems.

Melissa Lee, the moderator of the show, noted that crude fell below $95 a barrel. Seymour said the decline had less to do with fundamentals and supply disruption and more to do with an inverse dollar trade.

Adami said the oil service names like Halliburton (HAL) look as though they are breaking down. Grasso said he was sticking with the refiners trade.

Looking ahead to July, Grasso noted that homebuilders and industrials have done well in July in the past four years. Seymour said the banking sector in Europe is in terrible shape because of the situation in Greece. Kelly said he would be looking to short Barclays (BCS).

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