Equities Sell Off Wednesday After Attempting a Comeback Midday

Equity prices sold off sharply at the open and then after gaining strength all day, sold off sharply again into the close. The DJIA (-80.05 -1.09% to 7270.89); the S&P 500 (-824 -1.07% to 764.90); and the NASDAQ Composite (-16.40 -1.14% to 1425.43) closed with a loss of just over -1%. Canadian markets remained strong through the close, however. The Toronto Composite gained +72.97 +0.93% to 7932.30, and the Venture Board was up +1.38 +0.16% to 854.97.

The Techs (XLK +0.9%) were the leading sector with the Semi-conductors in particular strong on the day ($SOX +3.0%), while the Banks ($BKX gained +2.4%). True to recent form, as the Banks lifted, there was a sell-off in gold, as $GOLD dropped -$3.30/oz to close at 966.20.

Crude Oil ($WTIC) gained +$2.54/bbl to close at 42.50, and is a tad stronger Thursday morning, up to 43.46 at about 8:15am ET, then softening a bit to 43.06 at 9am, still up so far on the day.

As for the Cara 100, the big loser, by far, was First Solar (FSLR -21.8%) on +238% average daily trade volume. The stock is almost down to our point where we will write puts. Other losers on the day were OXPS -8.9%, VIP -7.8%, and AET -7.7%. The winners were Applied Materials (AMAT +8.1%), plus Tata Motor (TTM +7.8%) and Royal Bank of Canada (RY +5.0%), which has lifted over +15% in the past two days. Deutsche Bank is getting a bid Thursday.

Earlier in the day Thursday, Asia-Pacific equity markets were mixed: Shanghai China (-3.87% to 2121.3), Hong Kong (-085% to 12894.9), and Japan (-0.04% to 7457.9) were down, while India (+0.59% to 8954.9) and Australia (+0.48% to 3297.4) lifted a bit.

At 9:00am ET today, the French CAC (+127%), the German DAX (+1.95%), and the UK FTSE 100 (+1.41%) were all very strong, and so was the DJIA futures (+90 to 7318).

Wednesday, US Treasuries lost a lot (-1.32% to 126.19) and are looking weak. The yields on the 30-, 10- and 5-year Treasuries closed yesterday at 3.601, 2.945, and 2.016% respectively. Equity bulls are actually looking for higher yields, moving capital from bonds into equities. As the Bank share rices lift, that has been happening.

Thursday morning at 9:12am ET (also 8:24am in brackets), the spot prices for gold, palladium, platinum and silver were: 943.35 (942.10); 196 (197); 1052.5 (1047); and 13.50 (13.55), respectively. The higher bank prices are depressing the goldminers as traders had hedged the failure of a major US or European bank by going long the gold and goldminer prices. So, precious metals have not been correlated to the US Dollar in recent months. Also, there is a lag factor as equity markets start to lift before the gold and goldminers lift.