The market broke down through support this week. $SPX retraced all the way to 1810, the January intraday lows. The $SPX chart remains negative, with a downtrend in place and heavy overhead resistance.

Conversely, the put-call ratios are becoming bullish. The computer analysis is calling these buy signals, and with the naked eye, one would have to agree.

Market breadth continues to be a problem. Both breadth oscillators remain on sell signals, but they are in oversold territory.

Volatility derivatives and indices are still underperforming in my opinion. Yes, $VIX remains in an uptrend, and that is bearish for stocks. But the absolute level of $VIX (28) is pathetic for the size and speed of the downward move so far this year in $SPX.

We have buy signals from the put-call ratios, the first longer-term indicator to generate a "buy." This can be traded, but as long as the $SPX chart is so negative, the intermediate-term picture will continue to be 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.