Today’s action was another in a series of bottoming attempts this market has been undergoing since early October. All major averages advanced solidly on strong volume and sectors we would like to see leading, faired very well. Even the semi’s staged a comeback after suffering yet another pounding after further negative reports last evening from Kla-Tencor (KLAC) and Maxim (MXIM:Nasdaq) 

We are encouraged by the market’s willingness to shrug off bad news today. The prime example is Microsoft (MSFT). After Mr. Softy cautioned of what the future held, the stock sold off in after hours trading; however, at the start of the day upgrades hit and the buyers emerged. That is action we haven’t seen in this stock for what seems like an eternity.

What we take from this, is the fact that this bad news was priced in and individuals who were inclined to sell have already done so. The negativity wafting in the air has been so hot and heavy lately we have needed goggles to remain focused on our optimistic outlook at Shark HQ. We suspect many weak holders of stocks gave up this week after yet another failed attempt at a rally. When participants are fed up and disgusted with the market, we have the ingredients to move higher.

Going forward we would like to see more life from semiconductors which have been beaten relentlessly. The sector is key and  will keep a close watch on this sector for opportunities. We remain optimistic; however, in order to solidly advance we would like to see the gains hold going into next week.

Don’t forget we have the FOMC interest rate decision on Tuesday afternoon which will be a market mover. For now we are thankful this week is over and will look forward to stepping back into battle on Monday.

Have a good weekend.

RevShark