S&P 500 Strategy 24th October 2013

Strategy	Entry	Stop	1st Target	2nd Target
Long	1741.75	1737.75	1749.50	1751.75

Key Levels
1754.50	All Time High
1751.75	High of the day
1749.50	R1/ Yesterday's Open
1741.75	Pivot/Yesterday's closing
1737.75	Tuesday's Open
1734.50	S1/Yesterday's LOD
1726.50	S2/ Previous All Time High

Review After the decision to re-open the government and raise the debt ceiling, the S&P 500 has climbed to make new all time highs at 1754.50 on Monday but experienced a decline yesterday when earning valuations were not up to the mark for investors notably Caterpillar Inc and Broadcom Corp. Even after lower than expected non-farm payrolls the market has continued to rally on expectations that tapering will not happen until next year or the FED might increase their asset purchases. The S&P 500 average price-to-earnings multiple was valued at 15.9x yesterday which is still below the levels seen in October 2007(16.5x) and March 2000(25.7x) and according to Alan Greenspan, we are actually at relatively low stock prices.

Strategy I have chosen to go long today and I have identified that entering long at the pivot which is also yesterday's closing is a good entry point as the market has not breached this level since the EU market opening. The opening of the non-farm payrolls day has been chosen as the stop for this strategy which means I have a bullish view for today's direction. We will look to book profits at our first target of 1749.50 which is also R1 and yesterday's open and our second target being 1751.75 which is the high of the day. Today's initial jobless claims number keeps a huge significance as the expected number is 320k which is lower than prev 358k.

Stop (Possible Cause) A higher than expected initial jobless claim number would trigger the stop and we would look for support at S1 or yesterday's low of the day.