Equities ended last week higher after staging the strongest rally in several months. The move is good news for the bulls but investors are cautioned not to read too much into it. Not only was last week quadruple witching options expiration but there was quite a bit of short-covering in the market as well. This means most of the action was driven by the unwinding of derivative positions and not true buying. In other words, last week's rally was a relief rally within a bear market and investors should remain cautious.

The next hurdle for the market will be resistance at the 4,500 level and it may be reached this week. If no more bad news emerges the market could surpass this level and make a move to retest the all-time highs. A move above 4,500 may be difficult however because there are few catalysts to spur buying on the calendar this week.