The stock market this week had one of the most volatile weeks in history. First, the bears were in control, driving $SPX to a new low beneath the 1100 lows of August. Since then, it's been nothing but up. This rally has not yet turned the picture bullish, but it's getting close. A close above the 50-day moving average at 1180 would be bullish.

The equity-only put-call ratios rolled over to sell signals last week, and they remain bearish.

Breadth (advances minus declines) has been swinging wildly back and forth. Currently the breadth indicators are positive.

Volatility indices ($VIX and $VXO) generated spike peak buy signals this week. A $VIX close below 35 would be even more bullish.

In summary, we continue to look for an October low and a strong rally thereafter. It did not seem to me that Tuesday's low was that low, but if this rally persists, I would have to change my opinion.

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, and also publishes several option trading newsletters.