The market has drifted into a dull, waiting state. Despite what appeared to be upside breakouts last week, there was no follow-through. In the end, it will most likely come down to $SPX price once again. In recent days, $SPX has been bounded roughly by resistance at 1420-1425 and by support at 1395-1400. A breakout in either direction would likely create some momentum.

Equity-only put-call ratios have remained on buy signals. Market breadth oscillators have deteriorated, but they still remain on buy signals (barely).

Volatility indices ($VIX and $VXO) weakened a bit as well. $VIX has moved up into the 16-to-19 range, which we view as neutral for stocks.

In summary, the bulk of the evidence is still on buy signals, but the market itself isn't responding. So now, we await the breakout of this narrow trading range in order to confirm the next move.

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.