The Standard & Poors 500 Index ($SPX) has finally broken out of the 1990-2065 trading range that had contained it for nearly two months. The breakout was not easily achieved, nor is it uniformly confirmed by all of the other indicators, but it is in place.

As for support, there should be ample support at 2065 and at several levels below that, all the way to the bottom of the trading range, at 1990.

Equity-only put-call ratios rolled over to buy signals a week ago Tuesday. You can see from the charts in FIgures 1 & 2 that the trading range environment has caused several signals to occur within a short period of time. Market breadth has been a problem, and may continue to be. For some time, both breadth oscillators have been jumping back and forth between sell signals and canceled sell signals (which are, in effect, buy signals). They are back on buy signals at this time.

Volatility indices have been in a trading range of their own. Only today did $VIX finally break down from its trading range, thereby confirming the breakout of $SPX.

In summary, the upside breakout should be respected, despite the less than enthusiastic breadth readings.

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.