You know, there's no denying the market is still in a technical uptrend. On the flipside, there's no denying the market is really starting to feel the weight of its big gains seen not just in the past few days, but over the course of the past few months. The indices moved a tad higher today on an intraday basis, but the lethargic effort petered out and became a modest loss. And once again, we have a lack of participation to blame for the failed rally effort. SmallCap Network's Premium Advice - Elite Opportunity Actionable short and long-term NASDAQ and NYSE stocks poised for index average beating returns. Experienced daily in-depth analysis of major indices and their ETF's for short-term trading profits. Earnings options plays. Commodity trading precious metals & gold. Currency, bonds and much more! Get in the know now by getting on-the-ground trading and investing advice to make you more money. 30-Day Money Back Guarantee. Click Here and Sign-Up Today! We'll look at the whole thing below in a moment. There's some other business we need to take care of first, like a detailed, visual look at this morning's housing starts and building permits for April. Construction Perks Up You may recall homebuilding had seen a bit of a lull over the past few months. Bad weather in February got the ball rolling, but even when the weather improved we never quite got the recovery we were hoping for. Well, that changed today. Housing starts and building permits both rolled in at a stronger pace than had been expected. Specifically, we saw starts reach an annual pace of 1.135 million homes last month, while permits reached a pace of 1.143 million. Those numbers - and the context of their history - are plotted on the chart below. No, you're not imagining things... starts and permits just hit their highest pace in years, overcoming the alarming slowdown we saw in February and March (and then some). While one month doesn't make a trend, one month is a good start. In this case, one good month tells us the longer-term trend is more intact than it had been given credit for. The rest of the real estate report card we care about is the number of new homes and existing homes being sold. We'll get last month's existing home sales data on Thursday, and next week we'll hear about April's new home sales pace. Just to give you a little perspective heading into those announcements though, here's where each of those trends are through March. Both are still in long-term uptrends, and we're expecting more strength for April. From the Site The guys at the site were on fire today. Normally I try and limit our mentions to just the top three, but I think we can justify squeezing in four key commentaries today.... if we skip the introductory thoughts. These headlines speak well enough for themselves. Why is Small Cap OraSure Technologies (OSUR) Surging? This is Not the Cohu of Yesteryear (ASML, AMAT, COHU) Time to Take a Shot on 500.com Ltd (WBAI) The Bon-Ton Stores (BONT) Earnings Report: Low Expectations? DDS & M There was more posted at the site today, and yesterday, but we don't have room to tout all those write-ups. They're easy to find at the site though. Just a word of warning... once you go to the site, it can be tough to leave. All that great commentary and those ideas can be addictive for trading junkies. Now, let's get on to the main event... handicapping the market after today's action. Here We Go Again Remember what we were saying just a few days ago about how the market's personality was one designed to aggravate as many people as possible as much of the time as possible, and the best way it could do so right now is to fake a breakout to lure people in, only to pull the rug out from underneath them? Yeah, well, we're not yet saying this is what's happening, but if that's what was in the cards, this is what it would look like. Just one day removed from what finally looked like a clean break above a big resistance level, the S&P 500 ran out of gas today. Take a look. Now, with several days of it on the books, we can see what a problem the lack of buying volume has become. Not only did the breakout effort start out with tepid participation, it's getting progressively worse. We can tell that with the shrinking volume bars above, but we can get an even better feel for the weak bullish breadth and depth by using our charts of the NYSE's advancers and decliners and the NYSE's up and down volume. This rally has not had, and still does not have, much gas in the tank. It's not like bearish volume has been running rampant, but there's been no real bullish volume swell either. That's a problem. Moreover (and despite what a bunch of other people seem to be thinking at this time), the already-low VIX has left stocks little to no room for any more meaningful upside. For what it's worth there's still room for the S&P 500 to pull back and not actually enter breakdown mode. That floor is now at 2092, where the 50-day moving average line (purple) and a rising support line (red, dashed) are close to converging. The index could slide all the way there and still technically be in an uptrend. Any decent break below there, however, and I can see this house of cards finally falling down. We got close to seeing it happen a couple of weeks ago, but the market managed to save its own skin. I don't think the bears are going to let that happen again, however. We'll see. I think John Monroe summed up this maddening market pretty well in the Elite Opportunity newsletter today when he explained: "The bottom line for the equity markets in general, excluding rates, the dollar, bonds and oil, short-term traders on both sides of the trade have been fairly frustrated. The bulls are scratching their heads as to why these markets aren't roaring on yesterday's breakout, and the bears are obviously besides themselves based on all of the technical signs over the last several weeks, which have continued to suggest a weakening short-term trend. However, there's one thing we can always count on, and that's for things to change." He's right - there's very little about this market environment that makes sense. It's been that way for several weeks now, actually. That in itself isn't a huge deal, but in this particular case I fear the change he's talking about is going to be one that (1) catches unsuspecting investors off guard, and (2) works against investors... as most market "surprises" do. Said in simpler terms, traders can deal with a pullback, but they can't deal with a pullback they don't see coming. And with the VIX as low as it is for as long as it's been this low, confidence is dangerously high. There's no getting around that. Sooner or later, it's going to come back to haunt us.... not with the beginning of a bear market, but with a decent, humbling pullback. In the meantime we've yet to see any real clues it's started to happen. The S&P 500's 2092 level is the only line in the sand we need to worry about for now.