ESH5 daily chart

The unofficial first trading day of the new year produced mixed results. ES had high open and sold off at closing. The selling from Friday continued, which it gave us a negative feeling.

The prospect of an election in Greece is having a temporary impact on our market. The sellers just took advantage of news and pushed price down. We still think this is a short-term adjustment or correction.

ES has an overbought condition in all time frames. Long-term buyers need the market to retrace to a decent support level before they can get on board again. The retracement could be larger than we expect. But it could also stop around the 1950 level. However at the current stage we still focus on the ultra-short-term selling side.

Today 2000 level is the psychology support level. A move below it will be bearish. It will convince the sellers to go for the 1975 destination. 2035.50-38.50 is major resistance zone. A break above 2040.75 line could push price up to 2046.75-50 zone to fill yesterday’s unfilled gap.

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