Over the last three weeks, the main sentiment indicators have moved off of the extreme bearish readings that were registered in the first week of June.

The Investors Intelligence bullish percentage had dropped to 34 percent on June 6 which was the lowest reading in the past two years. That bullish percentage has moved up to 37.2 percent.

The 21-day moving average on the CBOE Equity Put/Call Ratio had moved up to 0.793 on June 6 and has since slipped to 0.724. The 0.793 reading was the highest since last August.

The Rydex Nova/Ursa Ratio had reached as low as 0.227 back on June 7 and 8 and has since bounced as high as 0.327. The low earlier in the month was the lowest reading since September.

What these moves tell me is that investors are a little less cautious than they were three weeks ago, but they are far from excited about stocks right now.

The indicators are a long way from overly optimistic which suggests there is room to the upside, despite what we saw last Thursday and again on Monday.

The daily charts had become overbought, but the selling in two of the last three sessions has taken care of that. The weekly charts show stocks are still recovering from the extreme oversold levels.