Market Commentary from Muffett investments: Nasdaq

Earlier in the week we were bullish on the Nasdaq. we were looking for higher prices based on price action and divergence that was developing between the Nasdaq and S&P 500. However from Wednesday 22/7/26 onwards, price started to break market structure and the price was systematically sold off. Today we were looking at the liquidity of the 4 hour swing low formed last week and that was taken out. We were also looking for price to come to the Buyzone which we have highlighted in earlier posts. Lets illustrate this with some charts.

We have the daily candle chart of Nasdaq. Important points- price is below the daily 20 EMA and Daily 50 Ema. The Price is however currently above the 20 week EMA. This is important. Although there is short term weakness in the index with price consolidating and slowly drifting lower, the longer term charts are still bullish and this price action could still be considered as a pullback following an eyewatering rally. But we need to see if price can reject the liquidity/ buyzone and then bounce from this. This to us is bullish behavious. this area is also the area of the 20 week EMA. So ideally we want to see price holding the 20 week EMA.

See the line chart. the price is currently below the last swing low at 28430. This is the closing price on the daily chart. we do not want price to close below this. we are watching price closely to see if price can close above the line. This indicates bullish structure on the daily chart and if price closes below the line, the daily chart will become bearish. So how we close matters a lot.

We are looking at the 1 hour chart below. we are expecting price to have 3 drives pattern into the liquidity zone and followed by a big bounce. Ultimately the pirce needs to close above the zone around 28500 to become bullish.

Also if we are wrong and the liquidity zone does not provide support, then price can test the 50 week EMA as well. This will be the last bullish support for the index. We hope that it will not come to that.

All analysis done in good faith and not investment advice.

May the peace of the lord be always with you.