SAN FRANCISCO (MarketWatch) — Money is flowing into exchange-traded products that track the S&P 500, increasing the likelihood the broad index will coast to a new record high this week, and signaling the retail investor may be regaining confidence.

On Friday, the S&P 500 Index SPX, -0.46% closed at 1,551.18, its highest close since Oct. 12, 2007, just 14 points below its all-time high close of 1,565.15 reached on Oct. 9, 2007. On Tuesday, the Dow Jones Industrial Average DJIA, +0.13% topped its previous Oct. 9, 2007 closing record and has not closed lower since.

Week ahead: Watching China again

While analysts feel market momentum alone will push the S&P 500 Index to a new high, there are a few possible speed bumps along the way this week, and there’s no telling how long the momentum will last. But for now, the S&P 500 is expected to have it easy cruising to a new high.

“At this point, you don’t need much of a catalyst,” said Russ Koesterich, global head of investment strategy for iShares at Blackrock. “These things can be self-fulfilling when you’re this close. At this point, the absence of bad news has been enough.”

The new blood in the market served to pump up exchange-traded funds that had been seeing outflows earlier in the year.

About $1.84 billion has flowed into the SPDR S&P 500 ETF SPY, -0.39% so far in March, according to IndexUniverse. The ETF has $125.09 billion in assets under management.

Still, even with that recent infusion, investors have taken about $4.1 billion net out of the ETF in 2013, the second highest outflow for the year behind the $64 billion SPDR Gold ETF GLD, +0.28% , which is $5.53 billion light for the year.

Trader in the S&P 500 options pit at the Chicago Mercantile Exchange. Reuters

On the other hand, S&P 500 ETFs like the $8.46 billion Vanguard S&P 500 VOO, -0.40% and the $37.49 billion iShares Core S&P 500 IVV, -0.39% have seen net inflows for the year.

The Vanguard S&P 500 is up $1.53 billion and the iShares Core S&P 500 is up $1.47 billion for the year, according to IndexUniverse. For the Vanguard S&P 500, $381 million of that came in March, while for the iShares Core S&P 500 $1.37 billion flowed in over the past week.

Also, the SPDR Dow Jones Industrial Average ETF DIA, +0.16% has seen $617 million in fund inflows in March. For the year, $681 million has exited the $10.4 billion fund.

Possible speed bumps on the way to a new high

Two of the best-performing sectors in the S&P 500 — consumer discretionary and consumer staples, both up more than 10% this year — could come under particular fire in the coming week.

The most important piece of economic data coming next week is retail sales, said Koesterich, who sees consumer discretionary stocks as being particularly expensive at this point in time.

“The job market is not getting better fast enough to push wages higher,” he said. “While the economy is getting better, its Achilles heel is the consumer.”

Is it the S&P's turn?

The rest of the data in the coming week is second tier, so beating the lowered expectations will get the S&P 500 to its new level, said John Canally, chief market strategist at LPL Financial.

But what may prove to be a speed bump next week is data from this week as it settles in, Canally said, referring to the U.S. economy adding 236,000 jobs in February.

“The February jobs numbers are great but you don’t have the sequester yet,” Canally said, noting that if the sequester remains, it will likely shave about 130,000 jobs a month. “That talk will start over the weekend.”

For now, the sequester — $85 billion in federal spending cuts this year that went into effect on March 1 — has taken a back seat for investors, and keeping the government running past March 27 will probably not make too many waves. But as the gridlock in Washington goes on and the “sequester festers” into the summer months, expect investors to take note and perhaps profits, Canally said.

Another headwind that could buffet the upward trajectory of the S&P 500 Index next week could come out of China, with that country’s retail sales and loan growth data expected over the weekend, Canally said. Property-buying restrictions to head off a real-estate bubble in China initially dragged on U.S. stocks last Monday.

Other U.S. economic data in the coming week include the February producer price and consumer price indexes, and the March New York regional manufacturing and consumer sentiment reports.

At least in the world of actively-managed ETFs, financial advisors are mostly guiding investors back into the market, said Noah Hamman, chief executive of AdvisorShares. Those who have been on the sidelines for a while feel they’re lagging behind, he said.

“What’s driving it is hard to tell, but I feel its momentum and the media covering that growth,” Hamman said. “People get bought in. It feels like a function of that.”