The stock market has run into a little trouble this week. Things started out well enough, with a strong rally on Monday taking $SPX to new post-2008 highs. However, selling has commenced since then, fueled by several factors: an overbought condition, more poor news out of Europe (concerning Spain), the FOMC minutes which were released on Tuesday and appeared to indicate that the Fed is not planning on any quantitative easing in the near future, and now the Unemployment Report.

The chart of $SPX has held above support, and that is arguably the most important thing that can be said. There is a strong support area at 1385-1390.

Equity-only put-call ratios are bullish at this time. Market breadth (advances minus declines) has been lackluster for some time now. The breadth indicators rolled over to sell signals this week.

Volatility continues to be a very interesting indicator. If $VIX were to close above 17 and trend higher, then that would be bearish for stocks.

In summary, we remain bullish as long as $SPX holds above support. However, the market reaction to the jobs report is likely to push $SPX below support. If it closes there, that would be bearish.

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.