Tuesday's big rally was enough to swing things over to the bullish camp, heading into the year-end. The continued bullishness has carried the market to the point where it has now reached the traditionally bullish Santa Claus rally time frame: the last five trading days of one year and the first two of the next.

The $SPX chart is confined by two trend lines. A breakout through either trend line should propel a sizeable move in the same direction.

Equity-only put-call ratios have turned bullish once again.

Market breadth continues to swing wildly back and forth, as traders act in concert nearly every day. Currently, the breadth indicators are on buy signals.

$VIX has been divergently bullish for some time now. It was falling even while $SPX was falling, and now it is plunging -- nearly reaching 20 on Thursday.

In summary, the test of resistance is taking place now. We should know fairly soon whether or not it is successful. If so, bullish positions can be taken.

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.