Homebuilders Surge - Market Analysis for Dec 3rd, 2008

The Homebuilders ETF (AMEX: XHB) appears to have established a significant low at 8.21 on Nov 21, and already has carved out what exhibits a bullish initial upleg from 8.21 to 12.24 (11/26). The pullback into yesterday's low at 10.32 has been reversed this morning, in a powerful surge that is nearing a retest of the 11/26 high, which if hurdled should trigger additional strength towards a confrontation with the declining 50 DMA, now at 13.83. What now? My near-term work argues that for the next couple of weeks, the XHB is in a "buy the dips" set-up, on the way to 13.60/80. If the XHB pulls back later today, I will be looking to enter the long side for our model portfolio, but not here atop a 13% advance.