Markets little affected by attack on Brussels but technical analysts see end for rally

A terrorist attack on Brussels on Tuesday shook markets, but only briefly.

The STOXX Europe 600 recovered from early morning losses to close down just 0.2 percent while the S&P 500 closed down just 0.1 percent.

While such resilience often augurs well for the market, some technical analysts think that the stock market rally will end soon.

Analysts at Bespoke Investment Group wrote in a note that while more than 93 percent of stocks in the S&P 500 have risen above their 50-day moving averages in the rally, they expect "this breadth measure to cool off a bit" and that investors hoping to buy should "wait for a pullback".

Technical analysts Michael Riesner and Marc Muller of UBS are even less optimistic. They think that "the S&P 500 has reached its most overbought position since 2009" and "see the market vulnerable for a significant reversal this week".