NEW YORK (TheStreet) -- Last Thursday, we mentioned that the markets were searching for a bottom, and this past Friday, we mentioned that the markets may have found a bottom. In retrospect, that was the correct market call from a short-term trading perspective.

The S&P 500 index held its daily buy-trade level of 1842 last Thursday and zoomed higher from there this past Friday and on Monday.

With all this upside momentum on Monday, the S&P 500 was not able to close above its all-time closing high of 1878. This was the third attempt. On the edge, that is not a bullish sign.

The DJIA closed at 16,457.66, up 134.60, and the S&P 500 closed at 1872.34, up 14.72.

Volume was pathetic Monday, which is another bad sign. The up days in 2014 have been common for their lack of buying conviction, as has been mentioned in previous columns.

On a more positive note, just when the bears were growling the most to short this market at 1842, and saying that a market top had been put in, the markets came roaring back again, as has been the case this year. The "buy the dips, sell the rips" philosophy has been the key to trading this market.

As mentioned in Friday's column, the Nasdaq and Russell 2000 indexes were in oversold territory and were both poised for a continued move higher this week. The Nasdaq and Russell 2000 did indeed surge higher on Monday.

The Nasdaq closed up 43.23 points at 4,198.99 and the Russell 2000 closed up 21.22 points at 1173. Both indexes have now worked off their oversold conditions. A traders market, pure and simple.

If the DJIA continues to stay in the green, by Wednesday it will be well into overbought territory according to those same internal algorithm numbers that flagged the Nasdaq and Russell 2000 indexes as being oversold. So, I expect more volatility this week and some selling pressure as the week progresses.

We need to keep watch of the CRB Food Index and the CRB Commodities Index in 2014. The CRB food index is up +19.3% year to date and the commodities index is up +8.9% year to date. Both of these are inflation-accelerating signals. In addition, the Spyders Select Utilities ETF is up +8% year to date. Inflation slows growth.

The month of March is now history, so the end of month window dressing and quarter end is over. What the month of April brings is anyone's guess. The S&P 500 daily trading range held true again today. Trading the ranges is the formula for success in 2014.

Two positions that were mentioned in Friday's column were Orbitz (OWW) and Safeway (SWY) . OWW was sold on Monday morning for a nice profit again. I did add to the SWY at the close of trading.

At the time of publication, the author held positions in SWY, but positions may change at any time.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.