I don't want things to fall apart in the stock market. No really, I don't. But the unusual level of "CNBC Optimism" combined with a bad chart, and terrible reactions to so-called "good news" today are all leading indicators, to me, that all is not well in market land. Let's take a look at these items one-by-one: 1) A $6B deal between SAP and Sybase is announced. It can't help the market though. As I like to say, it's not the news but the reaction to the news that matters. The market's reaction was muted, at best. Tech stocks have been selling off all day. 2) Even John Chambers can't save the market. When America's most polished optimist, John Chambers, announces a "great quarter" and comes on CNBC, but the market sells off, that's a bad sign. Cisco reported its "strongest quarter ever," but the stock has sold off nearly 5% so far today. Hmmm. 3) The S&P chart, which I commented on here, is looking more and more awful. Following the trillion-dollar Euro bounce, further gains have been muted, and we are getting yet another rounded top in the context of a scary looking waterfall like pattern. You think all those High Frequency Trader (HFT) programs are done with their mini-panics? I don't. On the chart below, I have shown the downward angle of the top we've formed in the last few weeks, as well as circle the area where that interesting "panic gap," was created after the Euro bailout was announced. Notice that the "Euro Bailout Rally" is now just a blip in the overall chart. For whatever reasons, markets like to gravitate back to areas of huge turbulence -- especially when there was a large gap. This is what I expect to happen to this market. That area will be tested again and either fail or succeed. Disclosure: Short S&P (stop at 1175), long S&P puts.

SAP AG has agreed to acquire Sybase Inc. in a deal valued at $5.8 to beef up its mobile platform and help compete with arch-enemy Oracle Corp. The deal is an all-cash offer for Sybase shares at $65 per share. Could you have spotted the deal coming? Yes. I'm a big fan of stock screens. Sybase was on the radar here at the Rayno Report after it started showing up on stock screens as being undervalued, with the screens singling it out for solid profit growth and a low P/E value. We cited it in early March on our shopping list of stocks to pick up after the February market swoon. Another reason is that Fred Hickey, well-known technology stock analyst, was on top of the Sybase situation, calling it an undervalued company with buyout potential in this year's Barron's roundtable. Hickey has the hot hand, he also called out Novell for its large cash position just before it was picked up a bid from hedge fund Elliot Associates. If you were sitting on shares of Sybase, there's a huge premium. The deal price is 56 percent higher than the closing price of $41.57 yesterday. In after-hours trading stock last night, the stock was up 35 percent at about $56.

There is a surge of startups trying to address the management of smartphones in enterprise networks, which is surely going to be a massive issue. If you think about how the number of smart, networked mobile devices are proliferating, and how employees use them for both work and private purposes, you can imagine this is a big management headache. That's the opportunity that Silicon Valley startup MobileIron is going after. I spoke to MobileIron back to CTIA and have since done some more research on the company. The company last August raised $11 million in Series B funding from top investors including Norwest Venture Partners, Sequoia Capital, and Storm Ventures. The company is led by CEO Bob Tinker, who was a former business development manager for Cisco's wireless business units. He was also formerly vice president of business development at Airespace, which was acquired by Cisco in 2005.

Funny how the market works sometimes. I had been looking into Novell, which was an interesting idea brought up by longtime tech newsletter publisher Fred Hickey in this year's Barron's roundtable. I guess he was right because today hedge fund Elliott Associates offered to by the company for $5.75 per share, a 25% premium over yesterday's market value. Hickey had pointed out Novell's large cash position making it an attractive stock. Nice job Fred! Wish we hadn't been slacking on that one. In the meantime, I'm holding onto my Sybase (NYSE: SY) another Hickey pick, based on improving fundamentals and solid cash flow.Sybase holds $14 per share in cash and trades at a forward P/E of about 15 at a $44 share price. What's interesting about Novell is that it's already trading above the buyout offer, indicating that the market thinks there may be other, higher offers. Definitely worth watching!

The market tone is improving immensely. I expect that some kind of European "Baklava Bailout" plan is in the works and will be announced either Friday or Monday. In the meantime, I have been poring over stock screens and doing some analysis to see what kind of stuff has become irrationally cheap in this sell-off. I am selectively and cautiously picking up a few shares here on there based on value screens. What do I look for in screening stocks? Generally I look for stocks whose price/earnings ratios are cheap relative to Return on Equity (ROE), or their growth rate, or preferably, both at the same time. In other words if a company has an ROE of 30 and is growing 30% a year, but the P/E is 15, that's a cheap stock. Some of these stocks are redundant to my "Portfolio," but many have gotten even cheap since the beginning of the year, so I will add to them.

Company	Symbol	Market Cap	ROE	5-yr          growth	P/E   (forward)		Categorization
Microsoft	MSFT	245B	41%	10%	13		Tech, value, d
Apple Computer	AAPL	178B	32%	39%	19		Tech Growth
Sybase	SY	3.3B	18%	8%	15		Tech Growth
Gulfmark Offshore	GLF	636M	12.90%	26%	9		Energy

Apple is starting to get real cheap. The market is either pricing in financial Armageddon or Steve Jobs' head exploding. It has billions of cash, a new product, a 30% growth rate, and a P/E under 20. Haven't seen it this cheap in a while. Disclosure: Long AAPL, MSFT, SY, GLF