Equities extended their rebound last week but the move already appears to be losing momentum. The S&P 500 index topped out just above 4500 and with MACD and stochastic indicating overbought conditions. Without a new catalyst, and with much of last week's action-driven by short-covering, it doesn't look like the index can move much higher. The next target for resistance is at 4,600 and it may be reached this week.

This week the market will be bracing for another round of important economic data including the PCE price index and the NFP report on Friday. The PCE price index is expected to produce another hot figure if not an acceleration from the previous month. In either case, the data is expected to increase the odds of a 50 basis interest rate hike at the next FOMC meeting. The NFP report will be important as well, but more so for the wage data and how it impacts the overall inflation picture.