With the

S&P 500

up 1.64% and the


jumping 3.02% Thursday, many investors are asking if today's action was merely an oversold bounce, or the making of a more significant bottom.

While the definitive answer won't be known until the present becomes the past, that hasn't prevented people from sifting through their favorite tea leaves in hopes of positioning themselves for the future.

Sentiment readings, which are considered contrary indicators, are one of the first things people check to get a sense if a current move is reaching a reversal point. Among these, one favorite tell is the Volatility Index, or VIX, which measures the near-term implied volatility of S&P 500 Index options. As fear rises people tend to purchase put-option protection, driving up the cost of options. A peak in option prices has a good track record of demarcating market bottoms or turning points.

Right now, having run up last week, the VIX seems to be flashing that the worst is over. It fell 10% today to 17.80 and is now off over 20% from its intraday peak on Monday. The reading is moderately bullish in that even though the absolute reading is still low, its up-and-down arc was inversely proportionate to the market's swoon and rise.

Bears point to fact that this is now the ninth out of the last 12 trading days in which the VIX has moved up or down at least 10%, which they take as a sign that the yearlong downtrend of the VIX, which hit an eight-year low last month, has finally been broken and is about to reverse.

The put/call ratio, which measures the relative number of bearish to bullish options bets in the market, has also been climbing recently -- another bullish reading to contrarians. The 21-day moving average rose from 0.55 to yesterday's close of 0.69 over the last 15 trading days. While not considered panic levels, the equity-only put/call did post intraday readings above 1.1 in four of the last seven trading days, something it has not done in any prior five-month period. Today it backed down to a decidedly passive 0.51.

Somewhat vitiating this complacent reading is the fact that purchase of put protection in index-based products did return in force over the last week. The put/call in the

Nasdaq 100 Trust

(QQQ) - Get Report

is 1.61, or in the top 80% of its 52-week range. The scramble for safety in the hard-hit semiconductor space can be seen in the fact that

Philadelphia Semiconductors Index's


put/call has moved from 0.82 up to 1.23 in just the last five trading days. This kind of put protection in the broad index products provides a solid base for the buying of individual issues, and was an instrumental component in providing a safety net during the stock market's run in the second half of 2003.

These gauges are typically more reliable for flagging bottoms than tops, as bears who've been citing the near-euphoric readings of all these gauges over the past nine months know only too well.

Technical analysis also provides another popular place to find likely levels of support. Right now there appears to be support near 1075 on the S&P, and the fact that the 200-day moving average at 1058 was not breached is a positive. But bears will point to the now significant resistance that has been put in place at 1125, and demand a close above that level before ceding their view that the new trend is down.

Internal readings are pretty good, with breadth close to 3-to-1 positive, and up volume near 85%. New highs of 156 were back in the triple digits, while new lows have contracted to 20. Overall volume of 1.48 billion on the


and 1.95 billion shares was decent, but not massive enough to qualify this as a huge reversal day.

So is this a bottom? So far it looks we have indeed found an intermediate-term low, but how long and far it goes is a much different and tougher question.