Nasdaq analysis 30/9/26

“Believe nothing, no matter where you read it, or who said it... unless it agrees with your own reason and your own common sense.”- Buddha

We have the daily chart of Nasdaq above. We had a deep pullback at the end of July and price had recovered from this with strong impulse and then price went into consolidation followed by a strong impulse again and price is now in consolidation. It is important to remember that we can never know when a consolidation will start until after it has formed. And we can never know when price will break out of the consolidation. We can anticipate consolidation after a strong run but we can never be sure.

Now that we have identified consolidation, we need to anticipate manipulation and if we can identify manipulation, then we can participate in the distribution. Also until proven otherwise, a trend is a trend and we have to follow the trend. On the higher timeframes, the trend is clearly bullish and until price can close below the support, we have drawn, we should maintain a bullish bias.

So for a bullish bias, we want price to be manipulated lower and if this happens, then we can look to take longs after liquidity is taken. So in a way in algorithmic terms we consider consolidation as a means of engineering liquidity by the market makers. We have both buyside and sellside liquidity. And so if buyside liquidity is taken first out of consolidation (this would be manipulation) then the sellside would be taken. If however the sellside is taken first (again manipulation) then buyside would be taken in the distribution phase.

We have the 4 hour chart now. As you can see as the consolidation has developed, we have equal highs and equal lows. Ideally for a bullish outcome, we want the equal lows liquidity to be taken followed by a move up to take the equal highs liquidity. And this we think is the most likely outcome from the this consolidation. Also we do not know when price will move out of consolidation. So we wait for manipulation to happen. If price loses support, then our bullish bias is invalidated and we might move much lower. so if this happens, at Muffett investments, we will close a lot of positions from our portfolio.

we will start a new quarter tomorrow. Historically the october before the midterm election has been bullish apart from the october when Trump was in power. But i think that he understands that keeping the stock market high would be his priority especially as inflation is high and he looks like losing in the middle east. So our bias is for a positive outcome

Also many market participants are on the sidelines as they are worried about the current geopolitical situation and the stock market boom bursting. But all we need is a small amount of money to move the market, and then they will be forced into chasing the market. This is our view but we also understand that at times we can be wrong and we will take steps to protect the portfolio if we are wrong.

All analysis done in good faith and not investment advice.

May the peace of the Lord be with you all