The bulls have had enough good news in a the last week to help them push the market higher, but failure to do so would be very good news for the bears according to Philippe Gijsels, the head of global markets research at BNP Paribas Fortis.
"Last week, markets were bombarded with an avalanche of good news," Gijsels said.
Economic news coming out of Europe last week was much better than expected, with a European PMI that painted a much better picture than investors had anticipated and UK GDP increasing more than analysts had forecast.
"In all of this, Germany once again stood out as the strongest economy of the zone," Gijsels said. "All in all, this newfound economic strength in the euro zone was surprising for most, especially since the latest batch of economic figures coming out of the US was quite disappointing."
"Even though Mr Geithner insists that there will not be a double dip, there is already talk about a new package to support the economy. Strength in the euro zone and weakness in the US, that is certainly not the roadmap that most market watcher were following," he added.
The bulls have a lot to sink their teeth into, according to Gijsels.
"Despite the weaker economic figures, the earnings season is off to a very good start. A number of US blue chips like UPS and Caterpillar were able to issue strong guidance, and then we are talking about the future," he said.
GE raising its dividend also added to the positive momentum according to Gijsels, who believes the European banking stress tests gave both the bulls and the bears enough ammunition to fight each other.
GE is CNBC's parent company.
Friday's news that showed only 7 of 91 European banks failing "will be a stress test for the market," he said.
"Will markets calm down a bit and will we see something that gets close to a sustainable rally? It is clear that if the bulls, with all the firepower at their disposal, if they are unable to take this market higher, it would be a very worrying sign indeed," Gijsels warned.
Golden Cross vs Death Cross
A number of death crosses - the 50-day moving average cutting the 200-day moving average from the upside - are still in place and only a golden cross - the 50 day cutting the 200 from the downside - can negate the bearish signals being sent by the technical picture, according to Gijsels.
"We are at a very critical point indeed," he said.
The bulls have the ball now but if they are unable to score, it will be the bears' turn again, therefore volatility will remain in the markets, Gijsels said.
"We are certainly not looking for a quiet summer. This game will go on until one of the sides wins and is able to answer the $1 trillion question, to double dip or not to double dip, in its favor," he added.