The technical picture continues to improve -- especially in the area of put-call ratios. However, $VIX is still elevated and $SPX is still trapped in a trading range. We need to see improvement in those areas before intermediate-term buy signals can emerge.

$SPX is trapped in a trading range, with resistance at 1330-1340 and support at 1305. Equity-only put-call ratios have now confirmed their buy signals.

Market breadth generated buy signals a week ago, and while breadth has not been stellar, those breadth oscillator buy signals remain in effect.

Volatility indices ($VIX and $VXO) have remained quite elevated throughout the last few weeks. We continue to maintain the view that $VIX above 21 is bearish for stocks.

In summary, several buy signals have been generated, but confirmation is needed in the form of $SPX rising above 1340 and $VIX falling below 21. If that confirmation takes place, a strong bullish phase should ensue.

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.