The stock market euphorically gapped to new all-time highs on Monday, after the Tax Bill had been passed over the weekend. Pessimists might say that a gap to a new all-time high, on "the news," is a selling opportunity. They might be right, but it's really to soon to tell. One would have to see $SPX break some support areas before that could be confirmed. The bottom line is that the intermediate-term trend of $SPX is still up.

Equity-only put-call ratios have moved sharply lower over the past month or so, reflecting the ongoing bull market, which has been accompanied by heavy call buying. Hence they are overbought, but are not on sell signals at this time.

Market breadth has not been great. But that's been the case for over a year now, and the market keeps moving higher.

Volatility remains at extremely low levels, which is an overbought condition, but not a sell signal. $VIX is going to have to demonstrate some ability to rise and remain in an uptrend before this indicator would turn bearish for stocks.

Finally, we need to mention the bullish seasonality. The Santa Claus rally period began with the close of trading on Thursday, December 21. It encompasses the last five trading days of this year and the first two of the next year.

In summary, the intermediate-term outlook is positive as long as $SPX remains above support and $VIX remains low. Short-term, there are some overbought conditions that could develop into sell signals, although one would expect them not to be confirmed until the current seasonally bullish period ends.

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.