US markets were closed this Monday for Martin Luther King Day but the American financial investors get ready for a busy week as US companies earnings releases. The SP 500 which closed to its highest annual level seems to be engaged in a strongly mechanical bullish trend in the beginning of 2013. It is also supported by good employment figures and real estate statistics.

U.S. indexes remain well oriented thanks to encouraging economic data and good quarterly results from banks. Housing starts rebounded in December to their fastest pace since June 2008 and unemployment claims fell much more than expected last week to their lowest level in five years. The real estate market may provide important support to U.S. growth, while the decline in jobless claims is a positive sign for a labor market which has yet to see a recovery. Only U.S. consumers continue to remain worried according to the US consumer sentiment measured by the University of Michigan which declined to 71.3 in January 2013, against a level of 72.9 in late December.

The SP 500 has just taken over 200% from its lowest level of March 2009. Many stocks of major U.S. companies beat their record regarding high valuation despite lower profits compared to 2011. U.S. investors will therefore pay attention to a new wave of major quarterly publications. The trend remains mixed for the moment, Intel results were lower than expected but General Electric published good earnings with record orders while Morgan Stanley largely exceeded the consensus. This week looks busy with crucial publications as Johnson & Johnson, Intel, Google and IBM.

The dynamics of the SP 500 remains strongly bullish in daily data above 1460 points which also refers to the 20-day moving average. The index is about to test the 1500 high point which refers to the blue line on the chart, technical level where some profit taking could be observed if the next publications are not as good as expected. We will wait a break above this weekly technical level to take position towards 1550 points. Conversely, a failure at these levels would argue for a slight consolidation towards 1460 points.

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