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Stocks end mixed as traders await economic data

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Stocks end mixed as traders await economic data

Stocks in the US started off on the defensive as Japanese equities continued to move lower.  A stronger dollar weighed on stocks, generating negative sentiment for riskier assets.  Chinese stimulus helped the Shanghai markets rally, but this did not seem to eclipse Japans weaker than expected Gross Domestic Product data.

On Monday, Japan’s Nikkei fell after the country reported weaker than expected gross domestic product for the quarter ending in June.  According to official GDP rose just 2.6%, below expectations of 3.6% growth and down from a revised 3.8% growth in the first quarter. Despite the weaker than expected report, the performance over the past six months is the economies strongest in three years and a sharp turnaround from last year’s recession.

On the flip side, China’s Shanghai composite rallied 2.4% to a two-month high after the South China Morning Post reported that the government was offering financial stimulus to cities and regions to support economic growth.

Stocks in the US closed mixed, with the Russell 2000 and the Nasdaq 100 notching up gains, and the S&P 500 index and the Dow Industrials showing very small losses.

The Dow Industrials edged lower, as momentum continues to point to lower prices.  The MACD (moving average convergence divergence) index is printing in negative territory and the trajectory of the index is accelerating lower.  The MACD generated a sell signal last week as the spread crossed below the 9-day moving average of the spread.  Support on the Dow is seen near the 50-day moving average at 15,270, which resistance is seen at 15,700.  The RSI (relative strength index) which is an oscillator that measures overbought and oversold levels is printing near 49, which is in the middle of the neutral range.

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