Midday Update

The market is nicely higher today, and holding on to its early gains so far. The improved tone started early this morning with Europe, where the markets across the pond bounced. There has also been a flurry of better than expected earnings reports which has bolstered sentiment.

Last night, IBM reported a strong quarter and raised guidance, and its stock is up nicely today. We have also seen bounces in Wells Fargo (WFC) and Coca-Cola (KO), to name a couple others. While Goldman Sachs (GS) has seen a disappointing reaction to its less than stellar results.

There was also some good economic data this morning in the form of stronger than expected housing starts for June.

The dollar is lower today, as the euro gets a bounce. This is helping commodities, with gold prices near $1603 and oil prices higher to $97.75.

The 10-year yield is higher to 2.92%; and the VIX is down -4.5% right at the 20 level currently.

Trading comment: It's tough to get aggressive here, even though bearish sentiment has been rising, the put/call ratio has been very elevated, and expectations seem to be low enough that companies reporting solid earnings are seeing nice pops in their stocks. I would rather take note of those stocks reporting strong earnings, and then looking to add to them on days when the overall market is down and they pull back. When the overall tone of the market improves, those are the stocks that should lead the next advance.