Despite a couple of rough days this week, buy signals have emerged from our short-term oversold indicators, and so we have a more bullish outlook for the short term but not necessarily for the intermediate-term.

$SPX has retested the August lows and formed a "W" bottom, so that is support at 1870. A violation of that area would force a retest of the October lows at 1820. A move above 2000 would be bulllish.

Put-call ratios turned bullish just over a week ago, and they remain on buy signals now. Breadth has been weak, though, and both breadth oscillators remain on sell signals.

In the short term, three indicators have generated buy signals, but their effect is limited to a week or so in bearish markets such as these.

Volatility meatures remain bearish in that $VIX is still in an uptrend. It would have to close significantly lower to negate the uptrend that is in place.

In summary, these simultaneous short-term oversold buy signals should produce a market rally that lasts into next week. However, unless that rally has the power to alter the intermediate-term negative signals, the longer-term picture will remain bearish.

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.