The market is struggling, and several important indicators have rolled over to sell signals. However, volatility indicators and $SPX itself have not confirmed a trend change in the market from bullish to bearish.





$SPX has probed and tested the 1085 support level several times in recent days. If the 1085 level gives way, the next support level is 1020-1030, the area of the October and November lows.




Equity-only put-call ratios gave sell signals a couple of weeks ago. They arose from very low levels on their charts, which normally means they are strong sell signals.




Market breadth has been weak, and has generated sell signals as well.




Volatility indices ($VIX and $VXO) spiked upward when the decline began, as $VIX shot up to 28 in just three days. However, it has fallen since then, and a crucial question arises: "Is this just another spike peak $VIX buy signal, or is $VIX finally beginning an upward trend, which would be bearish?"

In summary, this is still just a correction, but if $SPX closes below 1085, it would confirm an intermediate-term negative trend.

Lawrence G. McMillan is the author of two best selling books on options, including Options as a Strategic Investment, recognized as essential resources for any serious option trader's library.