For a considerable period of time, $SPX refused to break down. From the June lows to the October highs, the trend was steadily upward as $SPX traded in a bullish channel. However, that channel was broken on Tuesday of this week, when $SPX broke through it and also broke through support at 1425-1430. This has changed the $SPX chart from bullish to, at best, neutral. Those who want final confirmation would also require a breakdown below the August lows at 1395. That would confirm an intermediate-term bearish outlook for stocks. Others are satisfied with the current breakdown as evidence of further price erosion to come, especially since most of the other indicators are flashing sell signals as well.

Equity-only put-call ratios turned bearish a couple of weeks ago. As long as they are trending higher, that is negative for stocks.

Market breadth has continued to slowly deteriorate as well. That has kept the breadth indicators on sell signals.

Volatility indices ($VIX and $VXO) have been the most recent to give up their bullish status (unlike put-call ratios and breadth, which have been bearish for a few weeks).

In summary, the breakdown below 1430 by $SPX, coupled with $VIX rising above 17, makes the market vulnerable.

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.