I am having trouble connecting a switch to a switched outlet. When wires on the outlet are disconnected like in the picture below, the power disappears in all outlets in the same room as well as in some downstairs.
When both of the black wires on the outlet are connected to its lower half and the red outlet wire is connected to the upper half, both halves get 120V no matter what position the switch is in. A continuity test shows that both red (1) and black (2) wires from the outlet each connect to wires 1 and 2 like they connect with each other somewhere inside the house. Is it supposed to be like that? When I run a continuity test on the other black outlet wire (3), I don't find any wire in the switch that would connect to it. Also, that wire is not hot.
What I want is the lower half of the outlet to be always hot and the upper part to be controlled by the switch as I have wired a ceiling fixture to the upper half. What is the proper wiring to accomplish this?