The stock market, as measured by the Standard and Poors 500 Index ($SPX) has been meandering sideways for the past couple of weeks. This had the effect of alleviating the overbought conditions that had existed two weeks ago. Finally, today, the ennui ended, as $SPX blasted to the upside. It made new post-2008 highs, and it looks certain now to test 1440-1450.

Equity-only put-call ratios have remained on buy signals throughout the last three months. However, they are now reaching extremely low levels on their charts.

Market breadth was modestly weak over the past couple of weeks, and there were breadth sell signals as a result. After today's strong rally, those breadth sell signals have been canceled, and instead breadth is in modestly overbought territory once again.

Today $VIX dropped back below 17, which is "bullish territory" to my way of thinking.

In summary, the outlook remains bullish as long as $SPX is above the support area of 1395-1400. After today's upside breakout, it would be negative to see that support violated.

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.