WITHOUT a boost from Washington policymakers or data showing budding strength in the economy, Wall Street’s rally may be running out of fuel as the S&P 500 eases off its 2010 high.

A data-heavy week could give investors hard evidence to justify a rally that lifted the S&P 500 16.8 percent from its 31 August close to the 2010 closing high hit last week.

But the index has been unable to move above 1,228, a key resistance level, and its chart is brewing a double-top formation, a very bearish signal.

“We’re susceptible to a pullback if we don't get any clarity on fiscal policy and if any of this economic data disappoints next week,” said John Lynch, chief equity strategist at Wells Fargo Funds Management in Charlotte, North Carolina.

“I would think you’re going to see some, not all, smart money pull their investment (out of stocks) the closer we get to 1,228. These guys recognise we still have above 9 per cent unemployment, sovereign credit risks, a consumer deleveraging and no clarity as to what businesses should do with their cash.”

For the week, the Dow Jones industrial average and the Standard & Poor’s 500 index each fell 2.2 per cent. The Nasdaq Composite index lost 2.4 per cent. The S&P 500 brushed the 61.8 per cent retracement of its slide from the historic highs in 2007 to the low in March 2009.

This was the second time the index backed away from the 1,228 area and its chart could be drawing a bearish “double top” formation. The last retreat from that level, in April, was the start of a correction that took the S&P to its 2010 low in July.

The S&P 500 dipped on Friday below its 20-day moving average for the first time since September 1 but managed to close above it in a sign that that level could provide strong technical support.