Strong Corporate Earnings Continue To Top Expectations

Sorry for the lack of posts yesterday. Yes, it was just that busy. The market put in a surprisingly strong session yesterday, opening lower on the IBM earnings report, but then quickly bottoming and building steam throughout the day and into the close.

This morning, the market is slightly higher once again on several stronger than expected earnings reports. Apple (AAPL) was the big one, beating estimates by 40 cents. What is most surprising to me is that a company as large as Apple can still grow top-line revenues by +60% from last year. That is astounding. And while growth will have to slow due to the law of large numbers, I think that the company will continue to post solid growth and profitability for awhile.

There were also strong earnings reports from VMware (VMW), United Tech (UTX), Coke (KO), Morgan Stanely (MS), and Wells Fargo (WFC). The strong reports from those financials has the bank index nicely higher so far, even as the overall market is stalling.

The dollar is higher this morning after weak debt auctions in Portugal and Germany are weighing on the euro. Despite this, european stock markets are higher this morning. Asian markets were mixed overnight.

Oil is slightly higher near $78 and gold is also up a bit to $1194. The 10-year yield is up a tad to 2.93%, but still below the 3% level. The volatility index (VIX) is also higher today at 24.40, which shows expectations for only moderate volatility.

Also, Chairman Bernanke speaks today. While his comments are not expected to be different from the message he has put forth recently, there is always the potential for markets to react to something he says.

Trading comment: The S&P 500 rallied strong yesterday, and today is back testing its overhead 50-day moving average (near 1086). One of these times, the market is likely to be successful in breaking above that moving average and sticking. I think the bears are fearful of this fact, and if the SPX can get back above the 1100, it will likely spark another round of short-covering by the bears. As such, I remain constructive on the market's recent action.

long AAPL, VMW