As far as the $SPX chart is concerned, it has support at 1900. In fact, there is really support all the way down to 1860. A close below 1860 would change things, turning the chart to a bearish state if that were to happen.

Equity-only put-call ratios remain on buy signals. The standard ratio finally got in synch with the weighted ratio and issued a buy signal a couple of weeks ago.

Market breadth (advances minus declines) was very positive on the initial breakout over 1900. That is desirable, for it shows that the new bullish phase has plenty of support. But breadth indicators quickly reached overbought territory, though. Now, after three days of negative breadth, those overbought conditions have abated, but any more negative breadth will generate sell signals from breadth.

Volatility indices ($VXST, $VIX, and $VXV) have all recently fallen to extremely low levels. These low levels would certainly have to be considered "overbought." However, unless $VIX actually begins to trend upward (we are currently viewing a $VIX close above 13 as bearish), then stock prices can continue to rise.

In summary, the indicators are still generally bullish. Hence we are intermediate-term bullish, understanding that the overbought conditions can produce sharp, but short-lived pullbacks 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.