NEW YORK TheStreet -- The recent pullback in global risk assets affected commodities, currency and even some Treasury markets, but has been mostly absent from equities. Poor economic data out of the U.S., Europe, and China gave justification for a broad sell-off, and market analysts, including myself, were defensively preparing for equity weakness.The pullback never reached the levels that were expected, but inter-market consolidation took place. The existence of the Bernanke Put, an imaginary price floor that keeps equity markets rising, has proven to be real. The Fed's stimulus efforts may not be showing up in the economic data to the degree that many would like, but it has kept investor sentiment elevated.
The ratio above compares S&P Equal Weight ETF (RSP) over SPDR S&P 500 (SPY). This pair gives a deeper look into the participation or breadth of market moves, both up and down. The pair had been flirting with a downward breakout during the past few weeks, as negative news continued to pour on, but support held steady. Corporate earnings, although containing a few prominent misses and unimpressive revenue, have held up rather well. Many believed earnings would grow by a meager 1.2%, but that drastically underestimated the current growth of around 5.2%. The pair has yet to break out of its range, either higher or lower, but with equity markets hitting new highs, it shows a chance of breaking higher.