For the first time in a while, there has been some follow-through in the market ($SPX) after a technical level was breached. In this case, the support at 1060 has been breached. This should lead to a test of the 1020 support level soon.



Equity-only put-call ratios established sell signals in early August, and as long as they continue to rise, that will be bearish for stocks.



Market breadth has been very negative, but oversold conditions have arisen, and thus sharp, but short-lived rallies are possible.



Volatility indices ($VIX and $VXO) probed higher this week, and they have now established an uptrend on their charts. Such an uptrend is bearish for stocks.



In summary, the bearish trend remains in effect, although sharp, but short-lived oversold rallies are possible.

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.