As noted previously, equities were overbought and did consolidate last week. In both the S&P500 and DJ index futures contract (basis June) , the markets were close to reaching their recent highs, but then sold off in the last minutes of trading on Friday. There is more talk that a few of the major economies may have already experienced the worst of the recession. However, it still could be several months before this point is confirmed.
In the DJ contract, there is support in the 7955 to 7880. We still believe there is a possibility the market could consolidate down to the 7560 to 7420 area before the market takes out the highs of April 17th.
The S&P 500 futures contract has support in the 850 to 827 range. Currently we need the market to break above 870 to determine if the market will be staging the next up leg.