The positive market bias remains intact. The blue chip DOW rallied over 100 points on Wednesday after an 85-point gain on Tuesday. The NASDAQ also broke back above 2,600 on Thursday, while small-cap stocks also trended higher.

 The new-high/new-low ratio (NHNL) on the NYSE continues to be bullish with the last 57 straight sessions above 70%, including 49 of the last 53 sessions over 80%. Watch if the positive sentiment holds to help confirm the rally.

 The NHNL on the NASDAQ had been mixed in recent weeks, with three of the last seven sessions and 11 of the last 15 sessions below 70%.

 Markets remain largely bullish, especially the NASDAQ and Russell 2000. The DOW and S&P 500 are both moderately bullish. Watch for some overbought conditions, which should not be a surprise given the rally.

 Take a look at the volatility readings from the CBOE, which suggest a near-term bottom for both the NASDAQ and S&P 500. A rising volatility reading indicates a bottom, while a declining reading suggests a near-term top.

 The CBOE NASDAQ volatility index -- a barometer of near-term market volatility based on NASDAQ 100 index option prices -- is generally viewed as a contrarian indicator. The five-day CBOE NASDAQ volatility index to May 29 rose to 17.13 versus the prior week's reading of 16.21. The five-day reading is above the 30-day and 50-day MA of 16.58 and 16.95 respectively. Higher readings may indicate a near-term bottom.

 The CBOE volatility index is a barometer of near-term market volatility based on the S&P 500 index option prices. The five-day CBOE volatility index to May 29 rose to 13.45, versus 13.23 the prior week. It is above the 50-day MA of 13.25, as well as above the 200-day MA of 12.17. Higher readings may indicate a near-tem bottom.