The S&P 500 regained the 1,500 level for the first time in more than five years, but that's a milestone that could also trigger a pause, analysts say.
The S&P 500 briefly broke above 1,500 on Thursday and flirted with it all day Friday, before closing up eight at 1502, It's the first close above that level since Dec. 10, 2007. The S&P was slightly higher at midday, despite the steep 13 percent two-day decline in tarnished darling, Apple.
(Read More: Why Stocks Rallied Even While Apple Got Crushed)
"Fifteen hundred is a big level. This is where it died in 2000, and it died in 2007. This is the kind of the top of the dotcom bubble. This is a decade in the making and it's pretty big round number," said James Paulsen, chief investment strategist at Wells Capital Management.
But other than its psychological impact, the 1,500 level doesn't mean much for stocks, he said. Most traders are looking ahead to 1,565, the all-time high hit in 2007. Standard and Poor's said the S&P would have been up a half percent Thursday if not for Apple, which is 3.2 percent of the S&P, down from 5 percent in September.
Some traders had been looking for tech to help lead the market higher, and Apple's disappointment did not totally cloud that possibility. Paulsen points out that many technology companies were higher Thursday, and it was Apple and a few others that were impacted. Standard and Poor's said the S&P tech sector would have been up a half percent, instead of down 2 percent if not for Apple. Apple, still sinking Friday, handed the crown as largest company by market cap to Exxon Mobil.
(Read More: Apple Suppliers Slammed, but Experts Say Buy)
Art Cashin, director of floor operations at UBS, said the direction of the market should soon be clear, after its strong new year's run. He noted that the first move above 1500 didn't bring any panic from the shorts or immediate spike. The question now is whether the market will return to its highs.
"Slowly but steadily things have moved up. We've seen some signs of money being diverted instead of going into bond funds as we've seen again and again, and it's coming in here" said Cashin on "Squawk on the Street." "We haven't seen huge volume. We have not seen the sense of a short squeeze...a big panic. So, the question is can they keep creeping up until sometime momentum itself pushes them over."
(Read More: Douglas Kass on Apple: 'The King Is Dead')
The S&P Friday was higher for the eighth day in a row, for a roughly two percent gain in that period. Standard and Poor's said the last such run was in October 2006, for a 1.8 percent gain. The last time the S&P rose eight days in a row was Oct. 27 to Nov. 6, 2004 for a 3.6 percent gain.
Mark Luschini, chief investment strategist at Janney Montgomery, said the market is looking overbought, and it is due to rest unless some new catalyst surfaces — either in very strong economic reports or a string of more powerful earnings.
"We know these big round numbers have a psychology related to them. It's tough to break through because it reminds everybody that you're at a level you hadn't been to in a good long while. If we do break through, I think we could slip even higher," Luschini said.
But it may also give traders an excuse to sell. "I think the market could be setting up for a pullback. If you look at the economic surprise index, it's rolled over. You've come to the point where the market has borrowed on some of the good economic news," he said.
(Read More: What's Wrong With Apple? It's Not What You Think)
Paulsen said the Citigroup economic surprise index, which recently turned lower, may be reflecting the string of weaker data that was impacted by Hurricane Sandy, and it could recover soon. The surprise index points lower when there are more misses versus beats in economic data.