Charts: This Rally Has Bull Characteristics

The S&P 500 is giving strong technical signals it has entered a bull market and next week could confirm whether the index has finally shaken off the bear, independent trader Bill McLaren told CNBC Friday.

"Rallies in bull trends have very specific characteristics … and this rally has started to develop some bull market characteristics," McLaren said when looking at the S&P 500.

The index is due to fall over the next three sessions, McLaren said ahead of the open Friday. But if it then continues upwards toward a new high, the bull-market signals will give the green light, he said.

If the correction only lasts for three days, which has a really high probability of happening, it will be critical to the strength of the index, according to McLaren.

Banking stocks got a boost ahead of the open Friday after the results of the government’s stress test were revealed Thursday. The results, reported over the past week by various media, offered no bad surprises regarding the top banks’ ability to withstand more financial turmoil.

- watch the full interview with Bill McLaren above.