An oversold rally of some importance has finally taken place. This could be another false start, but it seems that finally, the rally should last for a while.

$SPX remains within the 1040 to 1105 trading range. A breakout over 1105, however, would make the case for a change to a bullish posture.






The equity-only put-call ratios are giving different signals. At today's close, the standard ratio has now given a confirmed buy signal The weighted ratio, however, remains on a sell signal.




Market breadth was very positive today, and breadth indicators are on buy signals.




Volatility indices remain on sell signals, unless $VIX closes below 29 which would be a positive sign.




In summary, the oversold conditions that existed earlier this week have disappeared, thanks mostly to the very large rally today. However, the intermediate-term indicators are turning bullish now, as well. If $SPX can break out over 1105, the entire picture would be positive.

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.