• Harris cuts guidance, and J.B. Hunt misses estimates.

Another company researched -- another pass!

The market quieted down in the last hour to close in the middle of its daily range.

After the close, Harris (HRS) cuts guidance and J.B. Hunt (JBHT) misses (the transports were lower most of the day).

Though liquidity has trumped profits and guidance, the disconnect grows wider day after day.

Thanks for reading my Diary and enjoy the evening.

• I am not sure whether I will be back before the market's close.

Heads up: I have a conference call with a company that I am investigating/analyzing coming up at 3:00 p.m. EDT.

I am not sure whether I will be back before the market's close.

• Mark Leishman's masterful performance gives me hope.

Mark Leishman is six under par through 17 holes -- he holds a two-stroke lead in the Masters golf tournament.

Below are Leishman's results in the major championships (2010-2012) -- just about as bad as how I played the 2013 stock market rally.

Maybe there is hope for me after all.

• Speculation in Zero Hedge.

Herbalife (HLF) to go private?  

• Nasdaq and Russell breadth now turns negative. 

• A poor bond auction has lifted the yield on the 10-year to over 1.80% after being briefly being lower.

• Well-above-average trading in the shares today.

Interesting tidbit: Monitise (MONI.L) has traded 15 million shares today -- well above the 9-million-share average daily trading volume.

•  A masterful suggestion.

"Cinderella story. Outta nowhere. A former greenskeeper now about to become the Masters champion. It looks like a mirac.... It's in the hole! It's in the hole! It's in the hole!"

-- Carl Spackler (Bill Murray), Caddyshack

If you are sick of watching the tape, I have an alternative!

As to my prediction, Tiger (now two under par) was picked way back in my surprises for 2013.

My Bud long shot is Dustin Johnson.

• I am adding to my QQQ short now.

I am adding to my PowerShares QQQ (QQQ) short at $70.03 now.

• Argus downgrades Intel to Hold.

Break in: Argus is downgrading Intel (INTC) to Hold now.

• I am now out of the name.

Housekeeping item: I am now out of my Caterpillar (CAT) short. 

• The risk/reward is too compelling.

I am raising my bid on Monitise (MONI.L) to $34.50 today, as the reward vs. risk is potentially too compelling to play around for a $0.50 to $1.00.

• The entire nondurable group is overpriced and appears to be headed to being more overpriced.

Normally I would observe that with the nascent cyclical rotation rebound trade petering out and the defensive safe-haven trade back on (consumer staples), another warning sign (regarding leadership) is blinking.

But that observation has been wrong-footed during the recent rally.

As I wrote previously, the entire nondurable group is overpriced and appears to be headed to being more overpriced.

• All the mortgage servicers are rallying today after the FHFA extended the HARP program until the end of 2015.

• This one might go back on my restricted list.

I have covered my Grand Canyon Education (LOPE) short.

I will revisit at a later date, though it might go back on my restricted list.

• Just peeling some off.

I am also peeling off some more Oaktree (OAK) in here.

• I shorted more shares at $24.41.

I added to my Yahoo! (YHOO) short at $24.41 this morning.

Shares more than fully priced now -- poor reward relative to risk.

This is a trading rental.

• Peer Patterson was downgraded due to weakening dental fundamentals.

I am adding to my Henry Schein (HSIC) short.

Patterson Companies (PDCO) was downgraded by a brokerage this week based on weakening dental fundamentals.

• I shorted more shares at $70.

I am adding to my PowerShares QQQ (QQQ) short at $70 now.

• Specifically, in Altisource Portfolio Solutions, General Motors and Ford.

I have reduced the following longs into this morning's ramp: Altisource Portfolio Solutions (ASPS), General Motors (GM), and Ford (F).

• Risk is back on the table.

Run, don't walk, to readKnowlege@Wharton's "CDOs Are Back: Will They Lead to Another Financial Crisis?" -- and so is Boca Biff back!

• The indices continue to be buyoed by the outperformance in consumer staples.

The consumer staples continue to trade to new highs, buoying the indices.

I am still long Procter & Gamble (PG), PepsiCo (PEP) and Colgate-Palmolive (CL), but they are now fully priced.

They may get more fully priced.

• I expect them to base build from here.

I recently added to my auto longs.

The stocks have had a nice little run (+5%), and I expect them to base build from here.

Nevertheless, I am holding on to these.

• Here is Deutsche Bank's take. 

Below is a summary of Deutsche Bank's view on Fortinet (FTNT) miss. The firm is reiterating its Buy but lowering its price target from $32 to $30. I think that's way too optimistic, though I have added small to the name in premarket trading:

Teleco, Latin America and European weakness drives shortfall.   FTNT negatively pre-announced its Q1'13 numbers attributing the shortfall to weakness in the US service provider space, weakness in Latin America and Europe and inventory shortage in certain product segments. The weakness in the service provider space was due to a mix of factors including change in buyer behavior patterns resulting in only part of deal materializing in the quarter, and drawn out sales cycle resulting in deals not closing in the quarter. There wasn't any change in the competitive landscape, and none of the slipped deals were lost to competitors.

Our $30 PT is based on CY14E FCF/share of $1.25, EV/FCF/G multiple of 1.1x and a 18% EV/FCF/sh growth rate. Downside risks include slower adoption of UTM solutions and competition from other security vendors.

• I modestly expanded my index shorts.

I expanded my shorts in iShares Russell 2000 Index Fund (IWM, $94.10) and SPDR S&P 500 ETF Trust (SPY, $158.79) modestly in premarket trading.

• I still expect a successful challenge of resistance.

Yields back off small after the jobless claims report -- I wouldn't look into that much, as the 10-year yield has risen from 1.68% to 1.80% since last Friday's dismal jobs report.

I still expect a successful challenge of resistance (1.835%).

• Small buy.

I am buying small Fortinet (FTNT) at $17.80. It is under my projected range, and it is approaching a price level where Cisco (CSCO) or some others might be interested at some point.

After last night's report, however, I have little fundamental conviction, as mentioned previously.

• Given a few seasonal adjustments, the four-week average is more representative of the trend.

Let's look at the four-week average of 358,000 as more representative of the trend.

The initial jobless claims came in at 346,000, about 14,000 less than expected.

Bear in mind that the last three weeks have been influenced by seasonal adjustments -- namely spring break and by the shift in Easter -- so let's look at the four-week average of 358,000 as more representative of the trend.

The four-week average takes us off of the January and March lows but back to the February trend. Though the week's number was better, I suspect it will not be market-impactful. (There was a small bump up in futures, now unchanged from pre-release.)

• I expect the yield on the 10-year U.S. note will breach technical resistance at 1.835% over the near term.

• Billing trends are down, but central banks seem to have altered the laws of investment gravity.

I continue to see more signs of slowing domestic economic growth. Recent billings trends are down in a number of technology companies such as Microsoft (MSFT), F5 Networks (FFIV), Fortinet (FTNT), Oracle (ORCL), etc., and in companies that are economically sensitive such as Family Dollar (FDO), Fastenal (FAST), etc.

The weakness in the real economy has been clearly trumped by investors' reception and liquidity generated by central bankers' printing presses -- central banks seem to have altered the laws of investment gravity.

I still don't believe that global easing will trickle down to the real economy to the degree monetary authorities anticipate.

First-quarter 2013 real GDP growth has benefited from inventory replenishment, but I continue to expect weakness in jobs growth, limited improvement in business fixed investment and a sharp deceleration in the rate of domestic growth from 3%-plus in the first quarter to about +1.5% over the balance of the year.

With nominal growth so low and profit margins so elevated, corporate pricing power remains poor, raising the likelihood that consensus S&P 500 profit growth expectiations are too optmistic.

For now, my concerns have fallen on deaf ears as liqudity has overwhelmed the global markets.

• Let's look at the overnight move in the markets.

Global markets hold onto gains overnight:

• S&P futures up 1;
• European markets up;
• euro up;
• crude flat;
• gold flat; and
• 10-year yields 1.80%.

Suffice to say, the market rally continues to surprise me. I will have more on it later in the day.

Noticeably, tech remains drek after very disappointing personal computer industry shipments and another miss at Fortinet (FTNT).

Late yesterday, I highlighted weak PC shipment data, and I shorted PowerShares QQQ (QQQ) in after-market hours at $69.96 as a result of this release:

After the close, IDC released its estimate of first-quarter 2013 PC industry shipments. (This is symptomatic of my real economy concerns written about today.) 

I believe the report is actionable, and I have shorted QQQ ($69.95) in after-market trading, as Intel (INTC), Microsoft (MSFT) and Hewlett-Packard (HPQ) will likely sell off (particularly in light of the strength in the group over the last week).

A decline of 13.9% units is now expected by IDC, much worse than the previous estimate of a 7.7% drop. This is the worst quarterly performance since 1994 when IDC began tracking the data.(Gartner's first-quarter shipment data painted the same story.)

The report was especially negative toward Microsoft ("Windows 8 not only failed to provide a positive boost to the PC market, but appears to have slowed the market".)

Below are my Fortinet comments from last night:

Fortinet's call went poorly -- particularly in light of the analysts reasonably good checks in the last week.

Several issues resulted in $13 million billings shortfall ($148 million vs. $161 million estimate):

• US teleco missed by almost $6-8 million -- it appears that customers are not preordering but waiting until orders are in hand.
• A volatile geopolitical backdrop in Latin America resulted in a $5 million miss.
• Short of inventory in new-product transition, it was a $2 million-3 million miss.

Execution questions and sales force turnover continue (problems over the past several quarters). Guidance on billings growth will move from high teens to 13%-15%, and the CFO search will continue.

The one positive was U.S. enterprise, which was on target.

UBS's immediate reaction to the conference call follows:

FTNT Negative CQ1 Pre Spreads Spending Caution to Security:

FTNT is the 6th infrastructure software negative CQ1 pre with misses across ITOPs, OS's, databases, middleware and now security. Most of these vendors came off solid CQ4 results and were feeling good about the prospects for CQ1 but CIOs in Q1 appear to have decided to digest late CQ4 purchases and place orders with caution uncertain on 2013 demand in their businesses.

Our software strategy is that Q1 'black ice' presents good buying opps as we expect spending to thaw in 2H so we're positive on FTNT, expect stock to stabilize near $18 major  support.

+ Remain Confident in FTNT Competitive Position and Cyber

Tailwinds:   

Overexposure to weak Telco demand (normally 30% of billings but represented 25% of billings in FQ1) was the primary driver for the miss. FTNT's performance-oriented product suite is suited for the Telco vertical so the timing of deals vs. competitive displacements to blame. Fewer big deals in EMEA also had a negative impact with big enterprises behaving cautiously (reminiscent 2009).

Secondary FQ1 issues around sales productivity in Latin America and inventory shortages are both items that the company should rectify by FQ2.

US Enterprise was healthy.

+ Estimate Revisions

We're lowering FY13 billings growth to +14% y/y from +19% with FQ1 est'd +8% vs. 17% prior and revs/EPS to $619M/$0.58 (OM-120bps y/y) from $630M/$0.61. We believe these est's are conservative but need more finc'l detail.

+ Valuation: AH

Trading 4.0x FY13E EV/sales.

Lowering PT to $26 from $28, based on 5.0x (prior 5.3x) revised forward NTM EV/sales.

Morgan Stanley chimed in this morning and has downgraded Fortinet from Overweight to Equal Weight:

Changing purchasing patterns in service providers, inventory shortages around new product releases, weak macro in EMEA, and sales management changes in LatAm all contributed to a ~8% top-line miss. While FTNT remains well positioned for consolidation trends in network security, the potential of changing purchasing patterns and uneven execution may impact growth for several quarters.

I added to my modest Fortinet holding last night in the after-market (under $19), but for obvious reasons, it is now a show-me stock. My guess is that the stock is now range-bound for a few months ($18.50-$20.50?), but I have little conviction in this name now. I prefer another speculative name, Qlik Technologies (QLIK).

Check out the video where the CEO suggested the possibility of a "beat and raise" this year.

I have lost $3 a share in Fortinet, and I have profited a like amount in Qlik.

Not a great showing.

• Here is what the analysts are up to this morning.

The analysts are busy this morning:

• Morgan Stanley and Wells Fargo boot Fortinet (FTNT).
• Deutsche Bank removes Apple (AAPL) from its short-term buy list -- it has been on for six months -- but Apple was upgraded from Sell to Neutral at Goldman Sachs.
• Microsoft (MSFT) was downgraded at Goldman Sachs and downgraded to Neutral at Nomura.
• Family Dollar (FDO) was downgraded at Goldman Sachs.
• Jefferies raises numbers on Qlik Technologies (QLIK) channel checks but keeps its Hold rating.

• $33.50 is my price.

I am bidding $33.50 for more Monitise (MONI.L) on the London Stock Exchange this morning.

• Here it is.

Below is a look at today's economic calendar.