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  • The DJIA gained back some ground but still ended down 285.26 points, or 1.1%, to 26,118.02.
  • The S&P 500 index fell  20.19 points, or 0.7% to 2,906.27.
  • The Nasdaq Composite Index dropped  1.1% to 7,874.15, a drop of 88.72 points.

U.S. stocks were under the weather as traders returned from Labour Day holidays to poor ISM manufacturing data and no signs of a solution to the US/Sino trade spat whereby further tariffs kicked in over the weekend. Subsequently, at its lowest point,  the Dow lost 425.06 points, or 1.6%. The Dow Jones Industrial Average lost    285.26 points, or 1.1%, to 26,118.02, while the S&P 500 index fell  20.19 points, or 0.7% to 2,906.27. The Nasdaq Composite Index dropped  1.1% to 7,874.15, a drop of 88.72 points.

US data

The ISM manufacturing index arrived at 49.1 for August versus 51.2 in July which was the first sub-50 reading since August 2016 and is the weakest figure since January 2016. “This is a clear disappointment that will provide further fuel to the market and President Trump’s desire for further Federal Reserve interest rate cuts,” analysts at ING Bank argued.

DJIA levels

The bulls need to get back above the 26500s and hold, then the 26900s will be in focus. On the downside, however, the 1915 to year-to-date Fibonacci retracement measures has the 23.6% marked at 21000 – below the Dec 2018 lows of 21712. The 21-monthly moving average is located at the May and Jun lows in the 24700s as a double-bottom target. The 23.6% Fibo’ of the March 2009 swing lows to all-time highs is located in the 22,200s.