It wasn’t difficult for the bulls to make headway on Wednesday due to the Speed Zone between 4412 and 4438. Speed Zones are ranges where price moved very quickly in one direction. This creates a zone where there’s very little resistance to price bouncing back the other way.

In this case, the Speed Zone was created on 4/3 and Wednesday’s price action retraced about 2/3 of that zone. The blue arrow on the chart shows the Speed Zone boundaries.  

The target zone, indicated on the chart, is 4438-4441 and it’s the path of least resistance.

A Note on Volume Profile

The histogram on the left side of the chart shows the volume distribution in the Nasdaq futures for different periods of time. Key support and resistance levels are indicated by the peaks and troughs.

Reid_4-16-2015_NQ.png

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