Early this week, $SPX closed at a new relative low, and many of the indicators appeared to be turning bearish (for example, $VIX closed above 14). However, prices have rallied since then, and $SPX made a marginal new all-time high today -- both intraday and closing. Is this probe upwards more effective than the probe downwards was a few days ago? It's hard to say, but a further close at new highs would solidify an upside breakout.

Equity-only put-call ratios have turned negative. The standard ratio has clearly begun to rise, and that is definitely a sell signal. However, the weighted ratio's sell signal is questionable. Market breadth have reversed direction, and are on buy signals now.

Volatility indices ($VXST, $VIX, $VXV, and $VXMT) probed above 14 a few times, even as recently as Wednesday. Since then, volatility indices have retreated and thus are in neutral-to-bullish territory.

In summary, another close Friday at a new high would constitute a bullish upside breakout, despite the fact that there are sell signals from the put-call ratios. Should that bullish breakout fail to materialize, we would remain neutral unless $SPX broke down below 1980.

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.