A week ago, a correction was underway, but the bulls were having none of that, and $SPX support held in the 1540 area for the third time in the last two months. The correction measured about 60 $SPX points, which is small considering how much the index is up this year, but it had the effect of relieving overbought conditions and paving the way for new buy signals on some of the indicators.

$SPX has now returned to the area of its recent highs (just below 1600), and although it was turned back from there today, it will likely give it another try soon. A move above 1600 will leave 1575 as the nearest support area.

Equity-only put-call ratios are mixed, with the standard on a buy, but the weighted still on a sell (barely).

Market breadth has not been particularly strong all year, but it doesn't appear to have mattered. The breadth oscillators returned to buy signals early this week. They are now modestly overbought already.

Volatility indices ($VIX and $VXO), as usual, have been among the more bullish indicators, and they still are. $VIX moved below 14 this week, closing below its 20-day moving average and thereby demolishing any thoughts that $VIX might be in an uptrend (a $VIX uptrend would be bearish for stocks).

In summary, the picture is bullish as long as $SPX is above 1575; neutral as long as it's above 1540, and bearish if it falls below 1540.

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.