$SPX now has resistance at the mid-September highs of 1730. There is support at 1680, 1660, and then at the August lows of 1630. This week, $SPX generated a sell signal, based on a recent overbought condition.That is one of the few confirmed sell signals.

Equity-only put-call ratios are bullish. The breadth oscillators have failed to produce sell signals, despite a stock market that was declining. If negative breadth develops in the next two days, these would turn negative, though.

Volatility indices ($VIX and $VXO) have remained subdued, which has been bullish for stocks. If $VIX closes above 15, though, that would turn this indicator negative.

In summary, the fact that the bears couldn't complete simple sell signals in breadth and $VIX speaks volumes about their ineffectiveness. But it doesn't mean they can't regroup, so we want to keep a contingent sell signal in place.

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.