The speed with which $SPX fell -- 63 points in two days -- meant that it sliced right through support areas without stopping. There is support at 1560 -- this week's low on $SPX. Furthermore, there is important support below there, at 1540, from a series of lows back in March and April.

Equity-only put-call ratios have not given confirmed buy signals yet. They remain on sell signals.

Market breadth was strongly negative for the three recent large down days. On this rebound, breadth has recovered. The breadth indicators are now on buy signals.

Volatility indices ($VIX and $VXO) are presenting somewhat mixed signals. $VIX gave a well-timed spike peak buy signal on Tuesday, and the resulting market action has been strongly bullish. However, $VIX is still in an uptrend, which is bearish for stocks.

In summary, this rally has been fueled by oversold conditions, which no longer exist, and by end-of-the-quarter window dressing. Bullish signals are building up, but it would take buy signals from the equity-only put-call ratios and a break of the uptrend in $VIX in order to give intermediate-term buy signals.

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.