A lot has happened in the past three weeks, but $SPX is literally unchanged from where it was at that time. A nearly 100-point round trip has taken place -- down, then up.

A move above 1850, to new highs, would be very bullish for $SPX. Although if it happens right away, it will be without support from many of our indicators. Meanwhile, there is minor support at 1800, and major support at 1740 (the February lows).

Equity-only put-call ratios continue to remain on sell signals. Market breadth has been quite strong during the rally. As a result, both breadth indicators are in overbought territory, but remain on buy signals.

Volatility indices ($VIX, $VXO, and $VXST) have fallen sharply. Their buy signals were generated on February 3rd, and they continue to remain in place.

In summary, the round trip by $SPX has left both bulls and bears puzzled as to what comes next. It seems likely that a pullback is necessary -- either to eliminate some of the overbought conditions so the market can rally to new highs, or to retest the lows and perhaps set off a more serious correction.

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.