Finally, there has been some follow-through movement to the upside. $SPX has made new all-time closing and intraday highs on the last two days. This keeps the $SPX chart bullish, of course. There is still the strong support at 2480 (the level from which the last major breakout occurred), and now there is also support at 2488 -- last week's lows.

The equity-only put-call ratios have slowly been working their way lower on the charts. That means they are still on buy signals. Call buying has remained fairly strong over the past two weeks, even though $SPX has been moving sideways.

Market breadth (advances minus declines) has been relatively bullish as well over the past two weeks. Even on days this past week when $SPX was flat or down, breadth was positive. As a result, both breadth oscillators remain on buy signals. Perhaps more meaningful is the cumulative advance-decline line. It continues to make new all-time highs, both in terms of "stocks only" data and in terms of NYSE data.

Volatility is low. Too low, some might say. In any case, when volatility is this low, it attracts attention. But as long as $VIX remains below 13, stocks can continue to rise.

In summary, all of our intermediate-term indicators are bullish and thus so is our outlook. We will remain bullish as long as the indicators do, preferring to follow the trend. Having said that, we also view the potential for a sharp, but short-lived correction as being significant right now, and even a slight increase in volatility could trigger it.

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, and publishes several option trading newsletters.