By Jeff Pierce
I’m not surprised that the market had trouble maintaining the new 2013 highs on the Nasdaq this morning. The red shaded area on the price chart is the resistance zone where it should struggle it’s upward movement. The wicks of those few candles represent an area where Michael Covel in The Complete Turtle Trader calls “Points of Price Instability“.
This is where one side or the other will win the battle of psychological warfare, and one exhausted side will give up. At these points there is a relatively small price difference between a trade working out and not working out. The cost of being wrong is lower.
If the Nasdaq can convincingly take that level and remain above it then I would become less skeptical that this rebound can turn into something meaningful. I don’t believe this is time to necessarily short….but being an aggressive profit taker is more my stance for now.