What Stock Market Rally Needs to Keep Bulls Running

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The Dow Jones Industrial Average punched through its record high on Tuesday, but for the rally to continue, some pros say the euphoria on Wall Street may need to spread to Main Street.

"It's not on record volume that we're reaching these record highs and it's not because of the chatter we're hearing outside on the street," Joseph Greco of Meridian Equity Partners told CNBC. "I'm a little concerned that in reality the market can't sustain it up here. The people that are going to be in are already in."

If these record highs are to turn into a sustained bull run, retail investors will need to jump back in more forcefully after sitting out the recent advance, Art Cashin of UBS told CNBC.

(Read More: Dow Breaks Record but Party Likely Won't Last)

There are signs that retail investors have begun to move back into stocks – albeit tentatively. Individual investors bought stocks more aggressively than they have in three years, according to TD Ameritrade.

(Read More: Investors Jump Big Into Bull Market)

But there are plenty of reasons investors on Main Street may remain on the sidelines. The economic recovery remains fairly tepid, consumers are still recovering from the housing crash, unemployment is high and politicians are still wrangling over the country's fiscal problems.

Markets will get a better read on how the consumer and the U.S. are doing when the Federal Reserve on Wednesday releases it's "beige book" report of how the economy was doing in February.

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In the January report, the Fed characterized the pace of economic growth across its 12 districts as either modest or moderate. It also indicated a pickup in consumer spending and the real estate market.

Chad Morganlander, a Stifel Nicolaus portfolio manager, told CNBC he expects all 12 districts will show an improvement in economic activity in February.

But TrimTab Investment Research CEO Charles Biderman said the data have been weaker in February. "Wages and salaries grew less than inflation in February, so that's a negative number," he told CNBC, adding that they peg job creation at 100,000 for February.

Economists are generally more optimistic, expecting employers to have created 160,000 new jobs in February, according to a consensus estimate from Thomson Reuters. Higher payroll taxes and the threat of the sequester are likely to have kept employers from hiring aggressively.

The unemployment rate is forecast to remain at 7.9 percent, which will likely keep the Federal Reserve's bond-buying program going. The Fed has a target of 6.5 percent unemployment before it begins unwinding its stimulus measures.

ADP's employment report, closely watched for hints of what to expect in the government's jobs report, is due out on Wednesday. Economists expect the ADP report to show an increase of 175,000 jobs, according to Thomson Reuters.

January factory orders are also due out Wednesday, with economists looking for a 2.3-percent decrease following a 1.8- percent rise in December.

While the retail investors has not yet returned and there is still the risk of some unexpected shock from Washington, Europe or China that could force a pullback, markets can lean on Fed policy for support.

(Read More: Why China's Property Market Is Getting Scary)

Steve Massocca of Wedbush Securities said the market rally has been driven by zero interest rates which have forced investors to scramble for dividend-paying stocks in a hunt for yield.

"Investors will continue to chase yield all year long," he said. "That's going to propel stocks higher."