When the dust has settled, this looks like little more than a pullback from a slightly overbought condition to test the breakout level (at 1220). To sum up the $SPX chart: there is still support at 1220, and as long as that holds, it's a bullish chart.

Equity-only put-call ratios have remained on buy signals all week, despite the heavy selling earlier in the week.

Also, the breadth oscillators are back on buy signals once again.

Meanwhile $VIX has now fallen back quite a bit, triggering a short-term $VIX spike peak buy signal.

In summary, we remain constructive on the market. As long as $SPX 1220 holds as support, this market should be able to work its way higher.

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.