The $SPX chart is still bearish, as it continues to exhibit a series of lower highs and lower lows, occurring beneath a declining 200-day Moving Average. That is a bear market. There is support at 2350, the late December lows, and there is now resistance 2580-2600, which had been support earlier in the year.
Despite the market's move higher since December 24th, put buying has been very heavy. Thus, most of the broad-based put-call ratios have moved to new highs. That cancels out any previous buy signals. This is true of both of the equity-only ratios as well as the Total put-call ratio. So the process of building a buy signal in all of those must begin anew.
Market breadth improved a lot in the past week. Both of the breadth oscillators are now on buy signals.
Volatility has been very tame this week. Even when $SPX was down 60 points on Thursday, January 3rd, $VIX was barely higher. The short-term $VIX "spike peak" buy signal is still in force, and $VIX has not returned to spiking mode since issuing that buy signal. On an intermediate-term time frame, the trend of $VIX is still higher, and that is bearish for stocks.
In summary, we are taking a somewhat positive view of the short-term, especially if other oversold indicators chime in with buy signals. But the intermediate-term outlook remains bearish as long as $SPX continues to make lower highs and lower lows.
This Market Commentary is an abbreviated version of the commentary featured in The Option Strategist Newsletter.