The Homebuilders ETF (AMEX: XHB) is up against some tough resistance.

Homebuilder stocks have been showing signs of accumulation of late. But that may change if the number of vacant homes, foreclosed or otherwise rises further.

With so many potential empty houses and theoretically empty neighborhoods, it makes no sense to build new homes.

Thus, that's the dilemma faced by the homebuilders, and that may be the reason why it's still early to buy back into the homebuilder stocks.

The XHB ETF has been moving higher of late, tacking on some 40% from its December bottom. Yet, as the market has run into trouble in the last few days, so have the homebuilders.

Even more important is the fact that the market has already delivered a big rally off of the bottom.

For now, we suggest watching what the ETF does as it nears its 200-day moving average, near 24.

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