Stocks continue to have trouble rallying, but at least support has shown up in the 1870 area of $SPX. If that level is broken on a closing basis, it would mark the end of any short-term rally attempts.

Even though both equity-only put-call ratios are on sell signals and pressing against new highs, they are in deeply oversold territory.

Market breadth has improved this week. As a result, both breadth oscillators are now on buy signals.

Volatility indices and futures continue to be somewhat frustrating in that they just don't go up much when the market goes down. Still, the trend of $VIX is higher right now, and that's bearish for stocks.

Even so, a further short-term rally is not out of the question, as long as support holds and the short-term indicators remain bullish. However, the intermediate-term outlook is still 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.