The S&P 500 rose by nearly 10% since the beginning of 2013 and remains one of the last major U.S. indexes to proceed towards its historical highs. Investors don't seem to stop the trend so close to these levels as they reacted calmly and carefully to the Cyprus situation. They wait for the terms of the bailout of Cyprus that could constitute a significant precedent. Wall Street continues to be reassured by a convincing set of economic statistics and the trend in recent weeks could continue as the U.S. stock market valuations remain attractive paradoxically.

It seems undeniable that the U.S. economy is getting stronger and resistant to the global economic downturn. The non-farm payrolls were marked by a solid return on U.S. unemployment to its lowest levels since 2008 and figures of real estate were in a recovery. Therefore, analysts and traders continue to see upside potential to Wall Street, based on traditional valuation methods. Thus, the price earnings ratio (PER) to a 12-month horizon is around 13.5 compared to 14.8 in 2007. The SP500 should soar up to 1650 points in order to match its historical average which means an increase of 7% above its current level. Finally, equities remain attractive because of increasing dividends while interest rates stagnate near their lowest. Investors remain convinced that this increase does not look like a bubble and there is no sign of major euphoria that often marks the end of a rally.

A lot of publications is expected this week : durable goods orders and new home sales and GDP on Thursday.

The dynamics of the S&P 500 remains strongly bullish in daily data above 1545 points, which also refers to the 20-day moving average. After having reached 1565 points (historical closing of 2007) the index entered a slight consolidation as investors are monitoring European issues. We await the exit of the trading range (1545-1565 points) in daily data to take bullish positions and target new historical highs towards 1600.

This strategy will be implemented using the E-mini S&P 500 FUTURE (code: ESXXXX) on the CME futures market.