Equity markets came out of the gate strong on Monday but the move may be short-lived. The rally peaked out below the prior week's high and the 3,700 resistance target despite better-than-expected results from many of the nation's largest banks. The move suggests upward momentum could build but there are headwinds to overcome. If the market can not get above 3,700 by the end of the week the odds of another sell-off in equities will grow. As it is, the downtrend is intact.

This week's market action will be driven by earnings and economic data. Reports from names like Netflix, JB Hunt, Abbot Laboratories, and Tractor Supply Company top the list. On the economic front, reports from the manufacturing and housing sectors will be accompanied by the Leading Indicators and the Fed's Beige Book. The first report of the week, the Philly Fed MBOS, was negative and much worse than expected so hope for good news may be misplaced.