Is the U.S. housing market truly at a turning point, as investors seem to increasingly believe? Or is this actually a false dawn, meaning that there are problems and pain ahead for those who turned bullish too soon?

A rise in existing home sales last month shows things are getting better in the U.S. housing market, but the still-dire unemployment situation and the looming possibility of a jobless recovery may halt the rally by the end of the year. That makes the extension of an $8,000 tax credit for first-time homebuyers imperative.

Housing Market Showing Signs of Stability? Puh-lease!

New home construction fell in November by the largest amount in a quarter-century, as builders slashed production while facing the worst economic conditions since the Great Depression.

Expect more pain in the housing market next year, says Don Miller. Rising unemployment will keep the foreclosures coming. And as the backlog of inventories swells, Don says homebuilders still look ripe for shorting in this environment.