Almost like clockwork, the pendulum of this market swings back and forth within the bullish trading range that $SPX occupies. As long as $SPX stays within this range, the overall picture is bullish.

However, this time around, we are starting to see some more deterioration in some other technical indicators. In particular, the equity-only put-call ratios are beginning to seriously weaken. Moreover breadth indicators are on sell signals.

Despite the potential negativity of breadth and perhaps the put-call ratios, volatility paints a more bullish picture. As long as $VIX stays below 21, it is conducive to higher stock prices.

Overall, we are retaining our bullish posture -- mainly because $SPX remains in its upward-trending channel.

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.