Hello, friends and fellow traders. We don't actually have a lot to work through today, but what we do have is pretty important stuff. Let's just dive in with what's likely to be the least important data nugget and build our way up to the big highlight for the day. That not-so-crucial piece of information? Last month's sales of existing homes. If you're just reading today's headlines it would be easy to become worried about the condition of the real estate market. Sales of existing homes (as opposed to newly-built houses) fell from March's pace of 5.21 million to only 5.04 million in April. Not only does it seem like a step back, it was a bit of a surprise considering only a couple of days ago we saw multi-year high levels of building permits and construction starts. Don't panic. This isn't surefire evidence that a real estate slowdown is upon us. In fact, we suspect it's quite the opposite. You just need a little more context than the media provided with today's data to see the bigger picture. We actually saw something similar happen two months ago.... just the opposite case. That is, we saw a second month of weak existing home sales, but that dip was offset by a surge in new home sales. Between the two figures, OVERALL home sales were continuing to inch higher. Though we won't get April's new home sales numbers until next week, I've got a funny feeling the lull in existing home sales for April is going to be offset there. In any case, here's the bigger trend for both. You can see how one makes big advances at the other's expense. Year-to-date, adding both figures together, we've seen home sales advance quite nicely. Here are the total combined (annualized) paces. January: 5.334 million units February: 5.433 million units March: 5.691 million units And based on analyst estimates for new home sales in April, we're likely to see an overall home sales pace of 5.521 million units. Honestly though, considering the strong upswing we saw in the starts and permits levels for April, I'm kind of counting on better-than-expected new home sales for last month. I know you can't build a house in just one month, but I've got a feeling the rising tide that pushed those numbers sharply higher has been rising a little longer than a month. Spurring the likelihood of strong new home sales for April was another footnote regarding today's tepid existing home sales data... there just aren't many existing homes to buy. Specifically, even with last month's surge in available homes to 2.21 million units, there still just aren't many houses to buy compared to long-term norms. All these homebuyers are being forced to look at new construction. It's not data we received this week, but since we opened the real estate can of worms this much we may as well at least show you the charts of home prices. Whether you're talking about the FHFA Home Price Index or the Case-Shiller 20-city Index, home prices continue to rise, underscoring the recovery. Both measures need updating, but even during the lull early in the year we saw sustained pricing strength. Bottom line? The real estate and construction market looks pretty darn healthy to us. We're not quite sure what anyone's worried about. What's Preventing the Meltdown From Materializing? More of the same from stocks today. That is, the market shrugged off a tepid two-day pullback on Tuesday and Wednesday and offered a small glimmer of bullish hope on Thursday... just enough to keep investors on the hook, so to speak. I still contend we're overdue for a pullback, but until the masses are in agreement, my opinion is irrelevant. Or, maybe it would be more fitting to say until investors become dissatisfied with what can only be described as grinding, almost imperceptible daily gains (on average), then this snail's-pace progress could last indefinitely. That's not been my mindset of late, but something John Monroe mentioned to Elite Opportunity subscribers in today's newsletter really got me rethinking about how the market works in the real world. He reminded me and everyone else: "At this point, I'm fairly convinced until we see some semblance of a major blow off top on a short-term basis, stocks still have the wind at their back. Why? Because a major upside move on new highs isn't something we've seen all year, so if that happens, one will have to strongly question if that's the blow off top to turn these markets in the other direction. With that, we're more convinced the better strategy at this point is to look for long or short ideas with respect to individual company names, rather than playing the broader markets as a whole. That, however, will change at some point soon." I think he's right, on both counts. As for the blowoff top (think of it as a diametrical opposite of a capitulation), in retrospect it's the one thing we haven't seen yet; the lethargic rally has managed to survive everything else. Maybe the bears just need to make the bulls an offer none of them can refuse. And as for using individual stock picks - bearish as well as bullish - to make money while the market simply drifts aimlessly, he and Elite Opportunity subscribers are up 15% on Kite Pharma (KITE) since he mentioned on Monday afternoon it was due for a bounce. It was a perfectly-timed trade, underscoring the notion that you can make some good money in this go-nowhere market... if you know where to look. Still, we do want to keep close tabs on the overall market, since it can ultimately make or break any stock trade. At this point we have to add a new technical ceiling to the mix. The S&P 500 has gotten comfortable above the resistance line at 2119, but seems to have been capped around 2133 all four days of this week. The good news is, the 2119 line almost seems to be a support level now, though we're not quite ready to blindly trust it as a floor just yet. You can also see the VIX finally broke under its key floor at 12.7. There's another floor at 12.1 though, so we'll have to see how the VIX plays out from here. It's putting pressure on the 12.1 level today, in fact, but suspiciously not breaking below it. It's no secret I'm not a fan of buying into stocks here. Valuations are crazy, and we've been technically overbought for far too long. The more I think about what John Monroe said about not seeing a reversal catalyst though, the more I think he's right. The bulls are willing to take these grinding gains. Something's got to jolt them out of that mindset and into a selling mood, and the only thing that seems capable of doing that now is one last bullish hurrah. In the meantime, a move above 2133 from the S&P 500 would actually cue another minuscule bullish leg. At the other end of the spectrum, it would take a break under the 2095 mark to signal the beginning of a truly-troubling breakdown. Never let it be said playing the market isn't a test of patience.