Updated from 6:55 a.m. ET to include results of latest Italian bond auction.

NEW YORK ( TheStreet) -- Santa's sleigh has hit some turbulence and it looks like it's going to go down to the wire on whether the S&P 500 can muster enough momentum to finish 2011 in the green.

Dennis Gartman, a well-known commodities investor that also provides market commentary, attributed Wednesday's swoon to rumors that a major credit downgrade of European sovereign debt was on the way. And although that hasn't materialized, he's sensing real apprehension across the pond following the euro breaking its 1.3040-1.3050 support level.

"The problem in Europe is that we've arrived at Europe's own 'Lehman-moment' when banks and institutions are wholly unwilling to lend money to anyone, anywhere," he wrote.

Gartman is also changing his stance on eurozone banks parking the vast bulk of the funding generated by the European Central Bank's long-term refinancing operation last week back with the ECB. Previously he thought it was the "reasonable" thing to do as institutions awaited making investments elsewhere.

"Now we consider it disconcerting for it shows the utter sense of confusion and the even more utter sense of fear that has engulfed the banking system in Europe," he said. "Rather than viewing these new credit lines from the ECB as a source of funding for investment, the banks in Europe are viewing those ECB-created funds as a source of 'fear capital' to be used should worst-come-to-worse on the continent. Fear rather than optimism is driving the banking system."

The mounting evidence of a lack of trust is what bothers Gartman the most.

"We fear then that worse is about to happen, for the very core of things banking and economic depend upon trust and trust is now wholly lacking in Europe," he wrote, adding later: "Thus any credit lines that the ECB has offered, or may in the future offer...and rest very much assured that the ECB is going to offer more, not less credit; it has no choice... are being drawn down and then parked. One can almost smell the fear evolving in Europe at the moment."

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