The big event this week is Wednesday, when U.S. Federal Reserve Chair Ben Bernanke testifies in front of the Joint Economic Committee, while the Fed releases the FOMC minutes to the April 30 and May 1 meeting.

The markets were all aflutter last week as John Williams from the San Francisco Fed (a dove) indicated he wanted to taper off purchases sooner rather than later.

But Bernanke is likely to reiterate exactly what he said at the May 1 meeting: that they are "prepared to increase or reduce" their bond purchases as the labor markets or inflation outlook changes.

(Read more: Bulls Will Be Driving Market, but Bernanke Is Steering)

The first quarter earnings season is mostly over, but next week we get the last wave of reports from retailers...that's because most retailers report on a February to April quarter.

So we'll hear from Home Depot, Best Buy, Saks, TJX, Lowe's, Gap, Target, Ralph Lauren and Autozone.

Big Data's first IPO is a big one. Tableau Software opened at $47, after pricing its initial public offering at the NYSE at $31. The initial price talk was $23-$26, then it went up to $28-$30, before pricing at $31.

(Read More: Big Data's First IPO Is a Big One)

Wait, there's more: the initial offering of 7.2 million shares was upped to 8.2 million shares. So instead of pricing 7.2 million shares at $24 (the mid-range) and raising $172.8 million, they priced 8.2 million at $31, raising $254 million.

Tableau Software (DATA) priced its IPO at the NYSE at $31. The initial price talk was $23-$26, then it went up to $28-$30, before pricing at $31.

Wait, there's more: the initial offering of 7.2 million shares was upped to 8.2 million shares. So instead of pricing 7.2 million shares at $24 (the midrange) and raising $172.8 million, they price 8.2 million at $31, raising $254 million.

(Read More: Fed's Williams Gets Markets Moving)

Not bad, eh? A software company? It's simple: Big Data. It's the new magic word, like "cloud computing" was a year ago. Their software allows customers to analyze large data sets using proprietary drag and drop commands. The company's description of what it does is refreshingly free of a lot of the jargon terms that characterize so many company descriptors. They help people see and understand data, to quickly analyze, visualize and share information. Get it? And no leveraged buyout here.

Stocks weakened shortly after 3 PM ET as the President of the San Francisco Fed, John Williams, said the Fed could begin easing up on bond purchases later this year.

So? Is this a surprise. It's important because Williams is a dove, which is why his comments are generating interest. Remember: there is a substantial community that believes the Fed is going to taper their purchases in September....and have positioned their portfolios accordingly. Traders with this view are seizing on anything that support their position. Talking your book, anyone?

But hold on. For one, Williams is not a voting member of the FOMC.

Second, Williams made it clear that the barrier for reducing purchases was a high one: "It will take further gains to convince me that the 'substantial improvement' test for ending our asset purchases has been met," he said.

Substantial improvement? Though Williams says the economic outlook is "clearly improving," you'd be hard pressed to see it this week. The economic data is going in the other direction! From May Empire and Philly Manufacturing, to April Industrial Production and Capacity Utilization, to today's April Housing Starts and higher Initial Jobless Claims, the data has been terrible this week!

Here are other headlines from his comments:

JOB MARKET STILL HASN'T MENDED ENOUGH TO END BOND BUYS

EVEN IF TAPERED, BOND BUYING COULD BE BOOSTED IF NEEDED

Get it? He's repeating what Bernanke said...if things get worse, they will ramp up, not down.

The markets continue a slow melt-up, but it suggests we are getting into overbought territory. One simple indicator would be the S&P 500 Index, which at 1,658, is now trading 12.1 percent above its 200-day moving average — that is a very rare occurrence.

A simple rule of thumb I've used is that the market is getting overbought anytime you get above about eight percent over the 200 day moving average, and certainly above 10 percent.

Another close, another new high for stocks.

Some observations:

1. Bonds getting hurt, with iShares 20 Year Treasury Fund (TLT) down 4.7 percent this month...but surely speculation the Fed will be lightening up its bond purchasing program...perhaps as early as September...is a negative for stocks?
   
2. The U.S. Dollar Index is rallying, up 2.6 percent this month, but instead of being viewed as a sign that the U.S. economy is improving, most traders are viewing this as an indication of an intensifying global currency war.
   
3. Commodities, particularly base metals are having a terrible year, with copper down 11 percent, aluminum down 10.8 percent, zinc down 12.3 percent. Hardly a vote of confidence in the strength of the global economy.
   

What do these contradictory cross-currents mean? This is what happens when you get global zero-interest-rate policies and QE3. You get strange distortions.

And stocks at new highs? The favorite phrase on the floor is TINA: There Is No Alternative.

Airlines higher: Morgan Stanley says "Rally Has Legs."

Airlines bucking the lower trend this morning: Delta (DAL), United Continental (UAL), US Airways (LCC), and Republic Airways (RJET) rise three to four percent.

Morgan Stanley made comments on airlines this morning, saying: "We continue to expect the stocks to grind higher from here in the shorter-term."

One immediate catalyst was Delta, which restarted its dividend on May 8. And while many airlines are at or near new highs, "We do not see a setup for a material short-term pullback in shares," adds Morgan Stanley.

The reasons:

1. Oil is higher, but jet fuel prices have not increased with it;
2. Expectations that passenger revenues will strengthen in May, June, and July versus prior months

Elsewhere: Zynga (ZNGA) and Groupon (GRPN) haven't had much good news recently, but they got it this morning. Activist investment firm Jana Partners, controlled by Barry Rosenstein, revealed new stakes in both companies, and fairly large positions: 21.9 million shares for Groupon (3.3 percent of outstanding shares), 25.4 million shares for Zynga (3.1 percent of outstanding shares). Both are up about six percent.

Many strange dislocations in the market: choppy economic data, but roaring stock markets.

May is not starting out great on the economic front: Empire Manufacturing was well below expectations, following a string of below-expectation regional manufacturing indexes. April capacity utilization and industrial production also came in below expectations, which makes sense given the weak manufacturing numbers.

This month's statistics will set the tone for second quarter gross domestic product (GDP) expectations: there was some excitement over the April retail sales numbers. Some are moving up their GDP expectations for Q2 — but we still have a ways to go. And remember, the Federal Reserve needs at least three or four solid months of economic growth before they will consider slowing their bond purchase program.

Rep. Scott Garrett (R, NJ) is holding a round-table discussion on stock market structure this morning in downtown New York that I am attending. Rep. Garrett is Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises (GSEs).

A long title, but more importantly, this is the committee with oversight of the Securities and Exchanges Commission (SEC).

In an interview I conducted with Rep. Garrett this morning, it was plain that he wanted to show he and the committee are serious about oversight of the SEC. He also appeared to send a message to its new chairperson, Mary Jo White, something loosely translated as 'we are watching.'