The broad market, as measured by the Standard & Poors 500 Index ($SPX) has finally managed to close at a new all-time high. A second day closing above 1850 would solidify the breakout and give it more credence.

Equity-only put-call ratios have finally rolled over to buy signals. Market breadth has been strong all month. As a result, the breadth indicators remain on buy signals, but they are in deeply overbought territory.

Volatility indices ($VIX, $VXO, and $VXST) have remained at low levels. As such, they are overbought. But just as the market can advance when breadth is overbought, so can it advance when volatility is "overbought."

In summary, the breakout above 1850 is positive, especially if it can hold these levels for a second consecutive day. There are no sell signals from our indicators.

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.