The bulls scored a major victory this week, by engineering a breakout and close above 1950 on Thursday. That completes the "W" bottoming formation. So for now, the near-term outlook is bullish.
Put-call ratios remain bullish. All three of the put-call ratios gave buy signals right at the February 11th bottom -- an excellent bit of timing, especially considering that these are 21-day moving averages.
Even market breadth, which has notoriously been the "weak sister" of the technical indicators for a year and a half now, is getting into the bullish mode. Both breadth oscillators are back on buy signals.
Volatility indices and derivatives have continued to frustrate a lot of market players. $VIX remains relatively high, considering the size of the rally that has taken place since February 11th.
Nevertheless, the horizontal line on the chart in Figure 4 shows that $VIX would have to break below 19 to "match" the upside breakout in $SPX.
In summary, the near-term outlook is bullish. With $SPX breaking out above 1950, and the other indicators all bullish to one extent or another, we envision a short-term rally by $SPX towards the bear market downtrend line. However, at that time, a new battle will be joined, and the bears might still come out on top if that trend line stays intact.