A few weeks ago, the S&P 500 reached a key bullish technical level, moving past its 200-day moving average for the first time since December 3. Not long before that, the index broke past the 2,700 level and technical analysts were quick to point out positive signs of potentially more upside.

However, there’s been a disconnect between the technicals of the S&P 500 and the broader macroeconomic environment–something traders will watch closely.

“On a valuation basis this market has risen to reflect a macro environment that is materially more positive than the one we currently have, and as a fundamentals-driven analyst, that makes me nervous over the medium term,” Tom Essaye, founder of Sevens Report Research said in a note Tuesday.

“The current macro setup much more matches the ‘Scattered Storms’ scenario, but the market valuation is reflective of a ‘Partly Sunny’ environment. That’s a discrepancy that will have to close,” Essaye added.

In the video below, Steve Chiavarone, Federated Investors, on why the bull market is alive and well. With CNBC’s Melissa Lee and the Fast Money traders, Pete Najarian, Tim Seymour, Steve Grasso and Guy Adami.

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