We Are Still Bullish 10-28-05

Good Afternoon.

The stock market is trying to shake-off yesterday's drubbing. The CSFB upgrade of Microsoft (MSFT) certainly helped the cause. In fact many stocks including the Semiconductors are looking washed out especially after this morning's weakness. The GDP report was solid as was Microsoft's report under the surface.

Longtime Mister Softee watchers will know that the company is notoriously conservative and rather slick. The fact that a $19billion stock buyback has been announced to be completed by December 2006 is of significant importance. If you had publicly committed to buying back $19billion of stock and you had the power to keep the price temporarily low…wouldn't you do so? Then again, if you had the ability to buy $19billion in stock you would be doing other things besides reading this trading blog. We love MSFT for their products and such but we are forever mindful that they are business people first. Therefore, the lackluster December '05 guidance should not be too surprising to anyone who can read between the lines, especially considering the fundamental news flow we have seen from other companies.

The Semiconductors are showing some hope with the leadership of Intel (INTC) and Analog Devices (ADI). All it will take is a bottom in this important sector for the Bull Market to spring to life. Perhaps the Fed meeting next week will provide the final catalyst. We are maintaining our very Bullish posture despite the fact that we are slightly licking wounds from yesterday. The small sales that we made after-hours will probably be repurchased over the next week. Money management discipline required us to take some action after yesterday's pounding. However, we are not wavering on our intermediate and long-term view.

This will be our one and only post for today due to meetings with new clients.

Have a good weekend.

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