The broad stock market has continued to rise almost every day (the latest streak was 8 up days in a row, in terms of the Dow-Jones Industrials). However, a number of overbought and over-extended indicators have come into play as this inexorable rise has taken place. Thus, the market seems ready for at least a short-term correction.

Intermediate-term indicators are more constructive. As has been the case for a while now, the most bullish intermediate-term indicator is the chart of $SPX itself.





Equity-only put-call ratios are mixed, with the standard ratio on a sell signal, while the weighted ratio is on a buy.




The breadth indicators are on buy signals at this time, residing modestly in overbought territory.




Volatility indices have remained subdued, and that is bullish.




In summary, despite some short-term concerns, the intermediate-term indicators are more bullish and, unless $SPX breaks through its major trendline, any corrections should be relative mild -- but tradeable.

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.