Market Struggling With Mixed Messages This Morning

The futures were pointing to a higher opening this morning, but a weak housing report threw a wet blanket on that. There were several more solid earnings reports last night, including some tech bellweathers.

AAPL and EBAY both topped earnings expectations, and both stocks are up today. AAPL beat estimates by a wide margin, and I heard it was the 25th consecutive quarter in a row they achieved this. Nevermind that they offered conservative guidance for next quarter, they always do that. I am confident that they will beat the estimates again next quarter, as Mac sales could pick up. And they have a big iPhone refresh still to come this summer.

There were also solid earnings reports from the likes of COP, PNC, EXC, and ZMH. UPS was the one standout that reported weaker earnings, and also issued downside guidance. They said they don't see a real recovery until 2010.

The existing home sales report was the one that caused stocks to drop. Homes sold during March fell 140k to 4.57 million, below expectations. It seems market participants were hoping for better numbers. Home sales slid -3.0% month/month, but prices actually rose over that period. So there is a small mustard seed for you.

Asian markets were higher overnight; the dollar is slightly lower today, which is helping boost gold price back above the $900 level; oil is also a tad higher near $49; the 10-year yield is flat around 2.95%; and the VIX is also flat near the 38 level, after an upward reversal late yesterday.

Trading comment: I did not pull the trigger yesterday on any new buys. I am still looking for a good entry point on GS and RIMM, and would also add V to that list. This morning, I did add a trading long position in HANS for our aggressive accounts.

I am hearing of a growing chorus of folks calling for a correction in the market. This tells me that there is still considerable cash on the sidelines, as well as many underinvested managers. They could all be right, but my inclination is that as long as the Street is positioned this way, pullbacks will continue to be mild relative to recent past corrections.

long AAPL, HANS