The good news is, the market logged its fourth straight day of solid gains on Tuesday, solidifying its message that stocks have escaped a bigger meltdown and are now moving away from the edge of a cliff. The bad news is, once again the bulls failed to pace themselves, tacking on too much of a gain in too short a period of time. A dip to some degree is in order now. The question is, how much of a dip? Just so there's no confusion, I'm back in the bullish camp for the foreseeable future. I was actually back in the bullish camp when we talked about the capitulation from last Wednesday [Now THAT's a Capitulation], and sure enough, the bulls made good on the hint they dropped that day. My bullishness doesn't mean I expect stocks to go higher every day from here on out, though. It just means the "up" days should be plenty productive, and the "down" days don't actually do much damage. Though overbought and ripe for a pullback after today's jump, any pullback from here isn't apt to do a lot of the kind of technical damage that puts the market back into a nosedive. Let's get specific so you know exactly what I'm talking about, using the S&P 500 as our proxy. Yes, the S&P 500 crossed above its 200-day moving average line (green) on Tuesday. It even pushed above the 20-day moving average line (blue) today. It all jives with my call for a revisit of the 1965 area, where a couple of other key moving average lines are about to collide. There's a problem with the rally we've seen thus far, however. From the low of 1820.66 hit last Wednesday to today's high around 1937, the S&P 500 has advanced 6.5% in less than five trading days. That's a lot, and you have to think at least some of the shortest-term traders are mulling a little profit-taking here. The other potential pitfall for stocks right now is the fact that the S&P 500 as well as the NASDAQ Composite both left behind gaps with their strong opens this morning. Generally speaking, investors don't like to leave gaps unfilled, which means there's going to be some downside pressure applied in the very near future. This will only exacerbate the problem of being overbought. Oh, and it's also worth adding that the volume on the way up has been rather weak. While this doesn't mean the market is doomed for new multi-year lows, it's another sign that stocks are going to have to peel back at least a little bit to go back and pick up the would-be buyers that didn't hop on the first time around. Now as much as I'd like to tell you my analysis was completely my own, it wasn't. I'll proudly thank the Elite Opportunity team for their daily work published in the EO newsletter. They keep my grounded, honest, and realistic about what's likely to be coming next. Take this snippet from today's Elite Opportunity for instance. "I mentioned yesterday there would be certain levels to start focusing on in the event the markets want to reverse their recent strength and resume their downward trend of late. With yesterday's follow through to the upside, it's probably a good time to address some of these levels for those short-term swing trading Members looking for a potential exit or target on those bullish leveraged ETF's so many of you entered last week. I've included a daily chart of the NASDAQ 100 (NDX) here today and as you can see, we're already seeing even further follow through to the upside following yesterday's nice move up. I've also included some key retracement levels we should be paying close attention to because although the indices put in a nice bottom last week and although we're still in a long-term bull market, there's no question these markets have clearly been in a downward trend since early September and one can only hope last week was the bottom.... ... There's no denying today's move definitely helps our suggested entry into TQQQ last week, however, we're likely looking at a test of the bulls' conviction sooner, rather than later. I've included the most important retracement levels from the NDX's September highs here to last week's low. As you can see, we blew right through [a key] retracement level, so it appears if we're going to get any sort of real test, it's likely to come anywhere between where the index is trading now and roughly XXXX [removed by editor], which represents the complete [key] retracement level from the same pivot points mentioned above." Sorry I had to take out some of the specifics John Monroe passed along to Elite Opportunity members in today's newsletter, but it wouldn't be fair to give you guys everything EO subscribers are getting. I will say, however, that John pretty much nailed where the high would be with his call today. Had you gotten the same advice Elite Opportunity members got in the middle of the trading day on Tuesday, you would have had time to get positioned just right for whatever pullback is in the cards. There's a good chance the market could open sharply lower at the open on Wednesday, which means you're being reactive and chasing the trend rather than being proactive and beating the reversal. Maybe it won't matter, but I fear that it will. It's just one of the perils of publishing an end-of-day market newsletter. Again, if you'd like the same kind and quality of advice you're getting here in the end-of-day newsletter but would like to get it during the trading day, then the Elite Opportunity is what you want. Here's the deal. Or, cut and paste this link: https://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1 Real Estate is Still Reasonably OK We got another piece of real estate data today. Normally I'd wait for a couple of new numbers before updating our chart, but since we have time and room today, we'll go ahead and get picture up for you. Today's data was the pace of existing home sales. As it stood at the end of September, existing homes (meaning not-newly-built houses, or previously-lived-in houses) were selling at an annualized clip of 5.17 million. That's the highest reading since September of last year, when the pace reached 5.2 million per year. We've seen the overall uptrend perk up with this data since early in the year, but longer-term, we see some stagnation with existing home sales. The existing home sales figure appears at the bottom of the chart below. You may also recall we heard September's starts and permits data last week, and though both were up, like existing home sales, things seem a little lethargic on that front. All the other data we update on our real estate trend chart is either due later this week or early next week. We'll get the FHFA Housing Price Index on Thursday, and the Census Bureau will report September's new home sales rate on Friday. Next week we'll get the Case-Shiller Index for August. Even without those three updates in hand, however, we can see there's still a decent amount of strength here. We'll update this chart for you as soon as we get the numbers. Also, later this week we'll give you guys an updated report card on Q3 earnings so far. It's gettin' real interesting.