Sure, Goldman Sachs' upgrade of the U.S. banking sector helped drive financial stocks higher on Monday. The better-than-expected reading of the ISM non-manufacturing index also helped.

But if you are receptive to technical explanations for stock market moves, you may be interested to learn that the 50-day moving average is also playing a role here.

Bespoke Investment Group noted that the S&P 500 closed on Friday just above its 50-day moving average, which put the spotlight on Monday's activity: If the index fell below the moving average - recognized by some observers as an important technical threshold - it would be a bearish move for the market.

However, the index was up 15 points, or 1.5 per cent, in mid-afternoon trading, which could be bullish. Bespoke noted: "If we close at these levels, the recent declines will be treated as just a pullback within the longer-term uptrend."

The S&P 500 hit a year-to-date high of 1071.66 on Sept. 22, and then fell a total of 4.3 per cent by Friday, leaving some observers wondering whether stretched stock market valuations and an uncertain economic rebound would spell the end of the stock market's recovery since early March.

Meanwhile, Vincent Delisle, a strategist at Scotia Capital, argued in a note that the fourth quarter will likely be a "show-me" period: Any delay in the U.S. economic rebound will hurt equity sentiment.

He believes that the S&P 500 has been in a so-called "euphoric/overbought territory" since mid-July, due to a 60 per cent rebound from its low in March. Therefore, risks remain that there will be a pullback from these elevated levels.

"Any pullback should remain muted, however, much like the one encountered late June (S&P 500 was off 7 per cent from June 12 to July 10)," he said.