So much for the bearish thesis. The S&P 500 as well as the Dow Jones Industrial Average both reached new all-time highs today on Thursday, mostly spurred by what was perceived as good news on the jobs front - unemployment claims dropped pretty significantly. The thing is... Good, But Still Not Great On the surface it makes sense. Employment (or lack thereof) has been one of the economic recovery's sore spots for too long, and if we're finally making a dent there, then the economy is finally starting to fire on all cylinders. Most all of you know how I feel about the 'on the surface' data the media loves to use as their fodder, however - just because fewer people are asking for unemployment benefits doesn't inherently mean more people are working. It just means more people are losing their eligibility for benefits. Just to tie some numbers to the mentality traders adopted today, only 334,000 people filed a new unemployment claim last week. That's the lowest reading since early May, and admittedly, is compelling. What's interesting is that the number of continuing claims (the total number of people asking for unemployment benefits) has actually grown the last two weeks the number's been reported. The continuing claims figure is a week behind the new claims figure, so it's possible the next round of ongoing unemployment claims will show the same drop that new claims showed this week. But, it's not like we're on pace for huge progress there. That's not to say employment is a mess. It could be better, but we've mentioned to you before how there's measurable progress when it comes to jobs. We're just saying things aren't quite as good as today's number - and the market's response to the number - would have you believe. On the other hand, the response to the news is the only thing that really matters in the near term. If the market's rising, regardless of the reason, that's the direction you want to trade. More on that below. The only other economic reality check worth a look today was something that we didn't have time to dissect for you when it came out yesterday... last month's housing starts and building permits. To put it in plain English, they weren't awful, but they certainly weren't encouraging. The total number of housing starts fell to 836,000. That's the lowest reading we've seen since August of last year, and solidifies the contraction in the trend that was first hinted at in April. As for permits, only 911,000 were issued in June. That's the lowest number since November of last year, and like housing starts, really solidifies a contraction that we first started to see a glimmer of a month earlier. Honestly, I'm surprised the market didn't freak out and sell stocks out of fear that one of the economy's few bright spots was starting to wilt. Then again, traders have a funny way of seeing what they want to see, and the only thing they want to see now is bullish. Weak housing market data means the Fed is going to work to keep interest rates low. Never mind the fact that it's also a sign that the economy is tepid. Yet, when new unemployment claims move lower and push Bernanke closer to the end of his QE efforts (which has been the only thing propping stocks up lately), investors still choose to see the glass as half full. Right or wrong, if the market's in a bullish mood - and it sure looks like it is - then the short-tern wind is going to blow things in an upward direction. Need I remind you of the short-term/long-term lesson we gave you a few weeks ago? Now, about the market's action on Thursday... Blastoff, or Blowoff? In case you were looking for it, Standard and Poor's didn't get the data posted in time, so I'm not going to have that earnings update for you today. Then again, even if the info was available I'm not sure I'd look at it rather than at Thursday's market's action. Today's surge may well be the beginning of a trade-worthy bullish move. I'll admit I'm concerned that Thursday's strength is something of a blowoff top. The Dow Jones Average as well as the S&P 500 hit record highs today, and it's not like the volume behind the move was light. On the surface it seems bullish, and it probably is. As those of you veteran traders can attest to though, the market has a knack for zigging just when the masses are sure it's going to zag, and a brief brush with new highs is the ultimate setup for a big reversal. I wouldn't rule out the possibility of a correction forming here, if only because that's the outcome that would dole out the most shock. We can even see how the indices peeled back off their highs for the day. And, though volume wasn't weak, given the entry into record-breaking levels, you would have thought the volume would have surged as newcomers plowed in. Not many of them took the bait though. Be that as it may, my scientist side says we have to take the clues at face value, which is bullish until further notice. Like I mentioned to you already, the indices hit record highs today, and closed above the prior highs. It was earnings and a positive spin on Ben Bernanke's comments to a Senate committee that spurred today's buying. With investors clearly looking at things through rose-colored glasses, today's breakthrough may well seal the deal and spark another round of buying. Indeed, I have to think stocks will keep running higher until we see a clear and decided reason why they won't... a requirement I wasn't going to apply had the market started to deteriorate without reaching new-high territory. Great, but how far is the market (let's say the S&P 500) poised to rally from here? I'm going to let the guys over at the SmallCap Network Elite Opportunity make that call exclusively for their readers. Those of you who are already members of the SCN EO got that upside target in this afternoon's newsletter. I may disclose that projected target later on, but for now, I think I'll protect the integrity of that premium service and give those subscribers the benefit of knowing something not everyone else knows. You can find out how high the SmallCap Network Elite Opportunity teams expects the S&P 500 to travel, however, by using the free two-week trial offer to the service. You've got nothing to lose, and a lot to gain. Here's how. Or, copy and paste the following link in your browser: http://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=SCN+Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1/