The $SPX chart continues to show support at 1490. Admittedly, that support seemed a long ways away after Wednesday's close near 1550, but after Thursday's big decline, that support level is once again within sight. If $SPX closes below 1490, it would a cause for concern, but on a more positive note, as long as it continues to close above there, the chart is bullish.



A week ago, the equity-only put-call ratios were on the verge of sell signals, but that has changed. The weighted ratio dropped to new lows this week (see Figure 3). The canceled any pending sell signals, but does leave the ratio in an overbought condition. The standard ratio has not accompanied the weighted ratio to new lows (Figure 2), but it has rolled over and started to trend lower again. That also cancels its sell signal of last week.



Market breadth had been working its way into positive territory through Wednesday, but Thursday's large decline has resulted in both breadth once again registering sell signals.



Volatility indices ($VIX and $VXO) had seemingly been in a bullish downtrend, since peaking near 24 a couple of weeks ago. Wednesday's $VIX close below 19 was also below the 20-day moving average. The bullishness of that data was wiped out by a huge rise on $VIX on Thursday. Once again, $VIX rose to 24. It would be negative if it closes above that level, but as long as it stays within the recent 18-24 range, it can be considered neutral at least.



Even so, higher prices seem possible as long as $SPX holds above support at 1490.

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, recognized as essential resources for any serious option trader's library.