Jennifer,
I was having the same issue and I learned from an ESRI staff member that the tool is not for aligning a point with another point, but just for moving a point to another location. Think in terms of freehanding the point to another location to align with something like an aerial photo, maybe even another feature that doesn't participate in the fabric. To align two parcels in the fabric you will need to use the unjoin/rejoin tools.
Dennis