The stock market rally that began on February 3 continues to persist, almost daily. The Standard & Poors 500 Index ($SPX) has only had two down days in that time. Even so, there is some question as to whether it has the strength to overcome what is stubborn resistance at 1850.

Equity-only put-call ratios gave appropriate sell signals in January, but once the stock market turned higher, these ratios just moved sideways. This is indicative of somewhat heavy put buying during the rally.

Market breadth oscillators continue to remain overbought and on buy signals. A $VIX close above 16 would be a close above the moving average, and that would be negative. Otherwise, the market can continue to rise while $VIX bounces around at low levels.

In summary, $SPX has undergone a 100-point round trip down and up in a short period of time. This has confused both humans and technical indicators. But it seems certain that 1850 will be an inflection point -- that is, the market will move away from this level with some force.

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.