Now that the Standard & Poors 500 Index ($SPX) has made new intraday and closing highs, joining the other major indices (except NASDAQ), there is once again no overhead resistance. However, increasingly overbought conditions may combine to slow the rally at least temporarily. $SPX has support just above 1670 (last week's lows), then again at 1650 (the June highs), and then at 1625 or so, where it traded for a time early this month.

Equity-only put-call ratios remain on buy signals. Market breadth has remained very positive. Both breadth indicators remain on buy signals, but both are overbought. Volatility indices ($VIX and $VXO) have continued to decline, and that is bullish for stocks.

In summary, the indicators remain bullish and our intermediate-term outlook is thus positive. There might be a sharp, but short-lived correction at any time, but as long as the majority of the indicators remain on buy signals, any correction should be limited in nature.

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.