The stock market finally halted its straight-down tailspin. A strong rally generated some oversold buy signals which could carry the market back towards its declining 20-day moving average.

The $SPX chart is negative, in a pattern of lower highs and lower lows, and that is what makes it bearish. Equity-only put-call ratios remains negative. Thursday's rally did not impede their march upward, and when put-call ratios are rising, that is bearish for stocks.

Market breadth indicators have diverged, but if Friday's rally holds up throughout the day, they will both be bullish.

Volatility indices ($VIX, $VXO, and $VXST) spiked to new relative highs early in the week, but now they have fallen sharply, which creates a buy signal. This is quite important.

In summary, the severity of the selloff in stocks created some severe oversold conditions. Those have now blossomed into buy signals, but there is still a much larger intermediate-term bearishness in place. The buy signals may generate a rally back to and through the 20-day moving average. But for anything more than that, the intermediate-term sell signals have to be reversed.

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.