Well folks, there it is. The market's been dancing with the idea for weeks, and finally pulled the trigger today. The S&P 500 as well as the NASDAQ Composite hit multi-year highs on Thursday, punching through the rather strong technical resistance that's been developing over the past few weeks. 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! It wasn't just stocks doing their thing either. Everything that was supposed to accompany this breakout effort materialized, including a pullback in bond prices yesterday, a pretty sharp drop in the value of the dollar (suggesting downward momentum is developing), and a nice renewal of the upward thrust in the price of oil, telling us the economy is strong enough to maintain brisk demand for oil. It's all right on cue, as one would expect to see in these circumstances. I still wouldn't bet the farm just yet though. We'll go over everything and give you our outlook below. We've got a couple of other items to get out of the way first. Homebuilders Plunge on Lower New-Home Sales Since we promised you we would, we want to be true to our word and show you an updated version of the home sales and inventory data chart we showed you yesterday. The only thing missing then was the pace of new-home sales for March; we only had February's data. Well, we got it oday, and superficially speaking, it wasn't great. The annualized pace of new home sales fell from 543,000 two months ago to 481,000 last month. Economists were expecting 520,000. Investors freaked out, of course, but I would encourage you not to follow that lead. Look at the bigger-picture trend. And when I say bigger-picture, I mean the WHOLE bigger picture, which includes sales of existing homes, for-sale inventory, and such.... you know, all the stuff we made a point of showing you yesterday. You don't even have to go back and look for Wednesday's newsletter though. Here's that chart, with March's new-home sales data at the bottom. OK, March's new home sales pace wasn't great. It wasn't oddly low though, and the longer-term trend is still pointed higher. And if you want to know why new-home sales were off a little last month, you only have to look at the sales pace of existing homes to see why - homebuyers gravitated to existing homes last month. It's possible there just weren't enough new homes to satisfy demand in March, which is a great problem to have if you're a builder. My point is, last month's data isn't bad. We just hit a bump, and that bump was offset in other ways. Besides, one month doesn't make or break a trend. And yes, the knee-jerk reaction to today's data is the reason homebuilder stocks plunged 3.5%. I stand by what we explained yesterday though. That is, the plunge in these stocks is actually a good buying opportunity for those investors looking a little further than just a few hours into the future. I'll say again, look at the whole bigger picture evident on our chart above. People are still buying houses, and there's still a very limited number of existing homes for sale. That's going to keep buyers funneled toward new homes. One Way or Another, It's Almost Over I know I've already said this about the current rally effort, but it still applies, so I'll say it again - there's something uncomfortable about the way this bullishness is unfurling. It's amazingly difficult to trust. In fact, in just the last hour or so of trading on Thursday, the bullish effort went from impressive to worrisome. We'll talk about why in a moment. First I want to run down all the relevant charts today that had a hand in the way the stock market is moving. Let's begin with the U.S. dollar, which I suspect did the lion's share of the work today. Take a look at the U.S. Dollar Index below. The rising support line we've talked about a couple of times of late (dashed) has been broken. Now all eyes are the 50-day moving average line (purple) and then the horizontal floor at 96.40 to stop the bleeding. If neither floor holds, that could be a source of near-term bullishness for stocks. Heck, even if the index merely tests the floor at 96.40 that would give at least a small boost to the equity market. We mentioned on Wednesday how both yields and bonds broke past some key barriers. Each is still on the "other side" of those lines despite today's reversal from both. While their respective breaks still stand, I was honestly a little bit surprised we didn't see any follow-through today. Crude oil recovered nicely on Thursday following a post-breakout lull. The fact that the former ceiling at $54.70 has ended up being today's support level and prod for the bounce speaks volume about the strength of the new uptrend. I know turmoil in the Middle East and the pullback in the value of the U.S. dollar have something to do with crude's advance today. I really think this is more of oil's true supply/demand picture doing the driving at this time, however. Then of course there's the stock market. This is where things get interesting, and a little frustrating. Yes, the S&P 500 reached a new high today. Take a real good look at our chart though. All it took was a brush of the former peak near 2119 to cut today's intraday gain in about half. Giving credit where it's due, the S&P 500 still closed above a minor, falling resistance line (dashed) around 2110, and technical ceilings shouldn't necessarily be easy to cross with the first effort. You can also see the VIX did indeed break under a key floor around 12.7. We'll skip a look at the NASDAQ Composite today, since it tells us the same basic thing - we're at the hurdle, but not really over it yet. Our conclusion? We don't have one quite yet, but we're thinking bearishly at this time. Part of that stance is the market's lofty valuation, and part of it has to do with the calendar. For the same reason we didn't want to jump the gun with a bullish stance though, we don't think you need to jump the gun with a bearish stance either. We'll even warn you now it may take a few days for the market to make a decision now that it's at the fork in road. We'll also warn you the market may make an effort to fake you out (in either direction) here because..... well, it can. In fact, it would almost be poetic to see the market heat up in late April to make it look like a summertime rally was in the works only to dovetail right into the whole "sell in May" thing. No matter how the chips fall from here, the next few days are going to be very interesting. Stay tuned, as we'll be talking about the bullish and bearish confirmation clues in upcoming editions.