Signals & Trading Plan for Wednesday 9/4/19

Market context
According to Bloomberg today:  “U.S. manufacturing is hurting. The ISM's purchasing managers' index unexpectedly fell to 49.1 in August, the first contraction in three years, on shrinking orders, production and hiring. New orders dropped to a more than seven-year low, while the production gauge shrank to the weakest level since the end of 2015.”

This news was the negative catalyst that spurred the selling today.  This was the selling that we discussed in our analysis last night.

Market gave us plenty of warnings that this was coming based on the patterns formed by $VIX $VXN on Friday.   We wrote: “on Friday 8/30, $VIX $VXN formed a “ready-to-rise” pattern.  And we fully expect them to rise back up to re-test the highs of August 28.”  And when volatility rises, stocks drop correspondingly.

So are $VIX $VXN done rising and stocks done dropping for now?

Today, market internals said: “Just a little bit more!”

The rest of this article covers:
Table of support and resistance levels
Updates from market internals
Planning your trades

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