All are consolidating for different reasons.
1.) The equity market is stuck between bullish and bearish economic sentiment. The bulls can point to the improvement in the labor market, the fact the US is still printing positive GDP numbers, the healing of the supply chain after the Japanese earthquake and the still positive ISM numbers. The bears can point to Europe and China's managed slowdown.
2.) The bond market bulls are concerned about the EU situation, and are therefore bidding up Treasuries. However, the IEFs and TLTs are right at support, indicating a trend break may be approaching. What would drive this move would be a successful resolution of the European situation along with adequate bullish news about the U.S. economy that would drive money from the bond market into the equity market.
3.)The dollar is caught between bearish sentiment caused by very low interest rates, an extremely accomodative Fed on one hand and being the "least dirty shirt in the hamper on the other. In other words -- it's an alternative to the euro, but certainly not the most viable.
There are two ways this plays out.
1.) The EU solves its problems. At this point, the major storm could hanging over the US economy is lifted, meaning stocks rally and bonds sell off.
2.) The EU crashes and burns. Reverse point number 1, except don't expect a major bond market rally as prices are already incredibly high, so the rally would be in the dollar.
