ES finished with sizable losses yesterday. The continuing Greek debt drama and U.S economic reports created fear in the market, especially concerns about an interest rate increase this year.

We had a narrow range Tuesday followed by a range expansion Wednesday. The sequence should be no surprise to our traders. In fact we should be thankful for any increase in volatility. More trading opportunities.

Yesterday ES stopped declining right above our key zone at 2090.25-89.50 before the price ran back to 2099 for closing. Today this key zone will remain an important decision level again.

As long as the price stays above it, ES will struggle to close near the 2100 level. Otherwise it will go further down to the 2075-2065 zone if price breaks below 2087.50. That will also confirm that 2134 will be the short-term top for minor correction.

The employment report in the pre-market will influence today’s activity. But as long as ES doesn’t exceed 2107, the seasonal bias favors the downside.

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