It is hard to imagine a market any more perverse than this one. Once again, there has been a failure to break out on the upside, despite some favorable (although not unanimous) technical conditions. Now $SPX has pulled back into the previous trading range, whose limits of 1810-1900 are more secure than ever.

Equity-only put-call ratios continue to remain on split signals. It is only fitting, I suppose, that these ratios continue to be in conflict while at the same time $SPX can't find a direction to sustain.

Market breadth indicators are in a bearish state now, with both of them on sell signals.

Volatility indices ($VXST, $VIX, and $VXV) have not risen much at all, and thus they remain in a generally bullish mode.

In summary, the market is back within its trading range, awaiting a breakout. I can't really imagine a less overbought condition than there was when $SPX made new highs last Monday, and yet there was no follow-through. So, the trading range appears to be the order of the day for the foreseeable future.

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.