The Market will be focusing on what was said at the Berkshire Hathaway conference
as the week begins. From there the usual culprits, EUROPE and Friday’s NFP, will become the topics du jour the remainder of the week. Against this backdrop we have the following:

An ascending wedge formation reflected in the daily chart. Since March 18 we have been looking for the S&P 500 cash index to move into the 2124-2150 zone centered on 2132.5 and 2138. EACH OF THESE 4 prices is critical resistance. The first pass (glossary of terms for MTS Numbers subscribers) at 2124 was within the Margin of ERROR and produced last week’s all-time high and the expected rejection. Every day following that rejection, an admonition was issued that the Bulls would not regain control of the chart until 2112 ES SPOT was tagged and then converted to support.

This warning was given because we have a CASH DOUBLE TOP on close at the March 2 and April 24 highs at the 2117+ cash price. The Bears dropped the Ball again on Thursday when they could not maintain prices below the ascending Red trendline on the daily chart. From a price perspective.

Since March, the daily commentaries have been increasingly calling attention to the wedging complexity and the frustration that often accompanies such wedges. A similar period from Oct. 13, 2005, to May 8, 2010, has also been highlighted.

For this week, the BULLS must convert the 2112 ES SPOT to support. (SPOTS are assigned basis cash pre-identified supports and resistances combined with Fair Value.) For instance, the all-time high thus far on the futures during regular trading hours using the large contract is 2119, a 1-handle overshoot of the 2118 SPOT assigned in February. The Bears NEED TO BREAK 2091.5 SPOT then gain acceleration back through the ascending red trendline BUT accomplish nothing of real importance unless they can break last week’s low. INITIALLY use 2091.5-2112 ES and work within those parameters to find the 5-7 intraday swings available. If we exceed either of those prices directionally then use 2083 ES, 2075.5 high critical if price is breaking down. Overhead, if we exceed 2118 then look to 2123.5 followed by 2126.5 ES spots for the next areas of resistance.

The Asian markets closed mostly higher, and in Europe 9 out of 11 markets quoted are trading modestly higher this morning. The week’s economic calendar includes 21 separate economic releases, 7 Federal Reserve bank presidents speaking, and Friday’s job report. Today’s economic calendar includes the Gallup US Consumer Spending Measure, Factory Orders, Chicago Federal Reserve Bank President Charles Evans speech on the economy and monetary policy in Columbus, Ind., and San Francisco Federal Reserve Bank President John Williams speech on creating jobs, in San Francisco, and earnings before the open from AMCX BSFT CVC CTSH CMCSA HYH HNT HSIC L MGM RLGY RYAAY TSN WLK, and after the close from APC CHUY XEC CGNX CXO DVA FNF RAIL IDTI KAI MIC PTCT QLYS SLRC RGR THC TXRH.
As always, please use protective buy and sell stops when trading futures and options.

• In Asia most markets were closed May 1, but 5 out of 8 markets quoted closed higher Monday: Shanghai Comp. +0.87%, Hang Seng -0.03%, Nikkei CLOSED

• In Europe 9 of 11 quoted markets are trading higher: DAX +1.31%, FTSE CLOSED, MICEX CLOSED, GD.AT -0.24% as of last reported

• Fair value: S&P -6.48, Nasdaq -8.30 DOW -80.77

• Total volume: Going up; 1mil ESM and 4k SPM traded

• Economic schedule: Gallup US consumer spending measure, factory orders, Charles Evans and John Williams from the Fed speaking.

• E-mini S&P 5002073.50-10.50 - -0.50%

• Crude56.50+2.39 - +4.42%

• Shanghai Composite

• Hang Seng27640.91-114.63 - -0.41%

• Nikkei 22519531.63+11.62 - +0.06%

• DAX11253.26-74.42 - -0.66%

• FTSE 1006915.90-11.68 - -0.17%

• Euro1.1352