Signals & Trading Plan for Monday 9/23/19

Market context
At the end of this article, we added a discussion on setting stops and where to get access to market internal data.

On Thursday evening 9/19/19, we wrote in our analysis: 
Market internals are all sending out the same message.  And the message consists of 2 parts: 

1. The Up Trend that started on 12/26/18 is still intact. 
2. Minor Dip2 (of Surge7 of the Up Trend) is not quite done yet.... 

Based on the message from market internals, we may see one more attempt for stocks to test Support1, or even drop down to Support2 tomorrow Friday, before Surge7 resumes for real.

And that is pretty much what happened during the day on Friday 9/20.  TQQQ dropped down to 62.74 as the intraday low.  And if you consult the S/R table from that same post, it says Support1 for TQQQ is at 62.75.   So once again, the messages from market internals came true.

But why did this happen?

In order for stocks to continue marching up, there has to be fresh waves of buyers.  These waves of buyers typically will jump in when one of these 2 things happen:

1. Prices drop sharply and quickly.  When this happens, you get the typical V reversal bottom that most buyers look for in chart patterns.
2. Prices stay in the same range for a long time, assuring buyers that there is strong support.  This is what happened during the month of August. Prices never went below 8/5 low.  So one month later, by 9/4, many buyers jumped in to launch Surge7.

Since Surge7 has started on 9/4, prices have not dropped enough yet to entice more buyers to jump it.  Without the V reversal, stocks have to prove that they have found support at some strong level before more buyers will actively buy again.  

Successfully testing Support1/Support2 is what buyers want to see.  And that is the condition we need to monitor for.  

The rest of this article covers:
Table of support and resistance levels
Updates from market internals
Planning your trades
Setting protective stops
Accessing market internal data

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