The stock market finally was able to take advantage of the favorable seasonal pattern and break out to the upside. It is now imperative that $SPX take out the October highs at 1293. It would be bearish if $SPX closes back below 1260.

Equity-only put-call ratios remain on buy signals.

Market breadth (advances minus declines) has been acceptable but not strong. This is a potential problem, and is one of the few negative divergences.

The volatility indices ($VIX and $VXO) have been in bullish downtrends for some time, and those trends persist.

In summary, the upside breakout and the confluence of bullish indicators should be enough to propel this rally higher for a while.

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.