Stocks recovered from a morning gap down to close lower but well off session lows, on light trade. Small cap stocks suffered the most yesterday as the Russell 2000 and the S&P MidCap 400 shed 1.0% and 0.7% respectively. The Dow Jones Industrial average lost just over 0.5% while the S&P 500 closed down by 0.3%.
Led by strong a strong recovery by AAPL and a strong performance by AMZN, the Nasdaq showed the most resiliency on the day as it finished lower by a scant 0.1%. Airlines, retailers and banks fared well on the day, while the coal, oil services and transportation sectors struggled.
Over the past three weeks the iShares MSCI All Peru Capped Index (NYSEARCA:EPU) has been consolidating in a tight range as it has set a sequence of higher lows. Yesterday, EPU formed a big reversal candle as it undercut the 20-day EMA but managed to recover and close in the upper 25% of its intraday range. A volume fueled move above the two day high of $44.88 could provide a buying opportunity in EPU. We are placing EPU on the watchlist. Trade details are provided for our subscribers in the watchlist section of the newsletter.
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