I suspect that the market will attempt to test a bit lower but then be held in place as quarter-end window dressing takes place as we move into the later part of the week. We remain in a bullish trend with the S&P 500 solidly in the 1840/1880 trading range. Do not be surprised to see a challenge of the highs as we move into the end of the week. That being said, I don't see a break out through the all-time highs just yet.
This week we will also hear from two Fed presidents: St. Louis's James Bullard will be speaking in Hong Kong on Wednesday ("Central Banks: Will policy making ever be conventional again?") and Chicago Fed President Charles Evans will be speaking at an Asian investment conference on Thursday.
Here's what we want to see: Will they run counter to what Minneapolis Fed President Kocherlakota said on Friday? Kocherlakota was the lone dissenter in the last Federal Open Market Committee meeting, saying he didn't support the current message, pressing the Fed hard on the promise to keep rates low until unemployment reaches a minimum of 5.5 percent and inflation hits the 2 percent rate.
(Read more: Kocherlakota won't become the Fed's next habitual dissenter)
In addition to the Fed speakers, the economic data points that will draw investor attention this week include: Markit PMI, the housing-price index, new home sales, pending-home sales (although I suspect they will discount due to weather if they are weak), durable goods, and Thursday will bring us final revision to fourth-quarter GDP. Expectations are for 2.7-percent annual growth rate, up from the prior estimate of 2.4 percent. If this report shows improvement, it will help bolster the Yellen commentary.
Either way, expect it to be an interesting week as the data heat up and investors now hold Yellen responsible for an improving economy to justify the continued taper and normalization of rates.
—By Kenny Polcari
Kenny Polcari is director of NYSE floor operations at O'Neil Securities and a CNBC contributor, often appearing on "Power Lunch." Follow Kenny on Twitter @kennypolcari and visit him at kennypolcari.com.
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Disclosure: The market commentary is the opinion of the author and is based on decades of industry and market experience; however no guarantee is made or implied with respect to these opinions. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment. The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of O'Neil Securities or its affiliates.