Nearly all of our indicators turned bearish in the last two weeks. The breakdown of the Standard & Poors 500 Index ($SPX) below support at 1680 was the trigger that turned the $SPX chart negative. However, market breadth is already oversold, and buy signals are beginning to appear from these indicators.

Equity-only put-call ratios have been interesting. The weighted ratio rolled over to a sell signal a week ago. The standard ratio, however,has been unable to confirm a sell signal. Meanwhile, volatility indices ($VIX and $VXO) have pushed upward, developing an uptrend, which is bearish for stocks.

In summary, the indicators are now mixed. The sell signals were well-timed, but the market drop quickly created oversold conditions. Those have sparked a rally, which is likely to be short-lived, but we will watch the indicators closely for any further bullish confirmation.

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.