Squid proxy loading from the localhost web server

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http://serverfault.com – I've just set up a squid transparent proxy inside my network. The proxy works fine, however it seems some sort of caching policy is causing the proxy to instead go grab a copy of the website, it's simply pointing to's HTTP web server (which is NGINX with multiple virtual hosts). Now this only happens after a site has been visited multiple times, hence why I believe it's a caching issue. I'm wondering now; does Squid have a builtin cache which points to port 80? if so, can i change the port to an alternative and simply set up a virtual site for it? OR is it something completely diff (HowTos)