Earnings have been largely better than expected early on. Revenue growth has been mixed and so far many companies have maintained guidance going forward, not increasing it. The reality is that corporate America continues to be apprehensive towards growth and is refraining from offering optimistic opinions that may not be met. Analysts have also been more conservative in their earnings estimates and, for this reason, many companies have been able to meet or beat the estimates. My thought is that the lack of revenue growth is an issue.

What has concerned me about the current market has been the absence of any correction. In a healthy upward trending market, you want to see some profit-taking along the way. We did see some on Tuesday, as the major stock indices were down over one percent after the open. The profit-taking should not be surprising, as investors have been looking for reasons to absorb some profits. In my view, the key will be the ability of the major indices to hold above the key chart levels and the 200-day moving averages.

Helping to trigger some of the selling was some concern after momentum stock Apple Inc. (NASDAQ/AAPL) failed to sell as many "iPads" as expected, despite blowing away fourth-quarter revenues and earnings-per-share estimates. The stock had been discounting so much optimism and growth that any shortfall, however small, would drive some selling. Yet, in spite of the shortfall, Apple delivered excellent results and continues to be the "best of breed" in the PDA space. Rival Research In Motion Ltd (NASDAQ/RIMM) is losing ground.

The banking sector may give some support and leadership to the broader market, albeit there are concerns regarding foreclosure losses that could amount to billions for the banking sector. In the banking sector, after the strong report from JP Morgan Chase & Co. (NYSE/JPM) last week, Citigroup Inc. (NYSE/C) reported a profit in its third quarter. This represented the third straight quarter of profit, much improved from a $3.24 billion loss in the prior year's third quarter and a penny above estimates. A key development was a decline in losses from bad loans. Bank of America Corporation (NYSE/BAC) and The Goldman Sachs Group, Inc. (NYSE/GS) also delivered some decent results that will help to offer support to the banking sector.

At this point, the third-quarter results look promising. The lack of upward revisions in revenues and earnings is noticeable, but I sense it will not be until sometime in 2011 when companies will become more optimistic about their business and raise their estimates. Of course for this to happen, we need to see job creation to drive spending and economic renewal.

Continue to ride the wave, but take some profits on some of the big winners. You can also play the upside via Call options, which help to control the risk at stake.