This week's action makes the $SPX chart bullish. How could it be anything else when trading at new all-time highs?.

There is no technical resistance for a chart at new all-time highs. There is support at 1850, which had been resistance, then at 1825- 1835 below that. It is our opinion that a close below 1825 would be quite negative.

Equity-only put-call charts continue to be bullish. Market breadth has been exceedingly strong throughout the recent month-long rally. That is strong confirmation of the new highs in $SPX. It would take at least two.

Volatility indices ($VIX, $VXO, and $VXST) spiked modestly higher during last Monday's decline, but the spiked right back down again. As long as these indices remain at relatively low levels, the stock market can continue to advance.

In summary, the indicators are all bullish at the current time. Thus, the intermediate-term picture remains bullish. However, the overbought conditions are building and a sharp, but short-lived correction can be expected at any time.

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.