Despite some selling early in the week (that seemed to be more of a reaction to a short-term overbought condition than to any real change of trend) $SPX still remains well above its rising 20-day moving average. It has closed above that MA every day except one since August 28. As I've said before, that is impressive. So the trend of the $SPX chart is bullish, and that is the best intermediate-term indicator that we have.

The two equity-only put-call ratios are diverging once again. The standard ratio is still bullish, but the weighted ratio has generated a new sell signal.

Market breadth has not been strong and both breadth oscillators remain on sell signals at this time. This is only a short-term condition.

We have seen some negativity from mBB, put-call ratios and breadth. However, volatility has remained firmly in the bullish camp. Even the strong selling of last Friday or the heavily negative breadth days of this week were not enough to entice $VIX to close above 13. As long as that is the case, $VIX remains in a bullish state for stocks.

In summary, when the market sold on "the news" early this week, it looked like a correction might be able to take hold -- perhaps driving $SPX down towards support at 2600. That was not the case. But even if a short-term correction were to take place, the intermediate-term indicators ($SPX and $VIX charts) are still bullish.

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.