Nasdaq analysis pre CPI- 11/9/26

“No one saves us but ourselves. No one can and no one may. We ourselves must walk the path.”- Budha

Please see previous Nasdaq analysis for context. Here we have the 4 hour chart of the Nasdaq. We have been in consolidation since August 4. But within the consolidation we are seeing accumulation in specific stocks. As this accumulation was happening, the S&P 500 and Dow Jones stocks were being distributed. This is what causes the divergence that we see between Nasdaq and the S&P 500.

If the above thesis holds true, the price will shoot higher after CPI and price should break out of consolidation in the next few days to the upside. Both the Dow and the S&P 500 should also catch up with the Nasdaq and continue higher. And the stocks that we are interested in can potentially move a minimum of 20%

Yesterdays price action was disappointing but as you will see below Nasdaq still managed to close above causing the divergence. However with the crude oil going up, we took a cautious approach and closed multiple positions as part of risk management. Even if our thesis is proved right, we lose a few percentage points. But if our thesis was proved wrong we can be in for a much worse performance.

So going into the CPI, we are hopeful and we hope that the price will behave like we anticipated it to behave. Our premise is that the market will trade higher into the midterm election and the Anthropic IPO will also be good for datacentre stocks. The price action has not so far invalidated our bullthesis with Nasdaq maintaining the higher low. The MAG7 stocks have held up very well and have not sold into this selloff.

This is the divergence between the Nasdaq and S&P 500. The Nasdaq has made higher low (partly a reflection of the MAG7 holding ground).. But this divergence can disappear if all the indices sold off after CPI. So risk management is key to this strategy. If we rally from here, then we will add aggressively to increase our exposure.

This chart compares the important MAG7 stocks.If you see closely they have all made higher lows. We have Amzn, goog, MSFT in both portfolios and META in one portfolio. if you look at the chart i would bet on META and MSFT on this rally.

So we wish you good luck and great investing for the coming CPI event and the rest of the year

May the peace of the Lord be upon you all.