Investors were optimistic heading into Friday's opening bell after positive developments out of Europe. Ahead of Sunday's all-important elections in Greece, EU leaders are working to link budget and banking policies within the common currency region and develop new initiates to spur economic growth.

U.S. economic data was also in focus, as early reports had the Empire manufacturing index coming in at 2.29 in June, falling short of the expected 12.5 reading, and declining to its lowest level since November.  May industrial production and capacity utilization cooled modestly, unexpectedly dropping for the second time in three months. The preliminary University of Michigan Confidence reading was expected to decline to 77.5 in June but it actually declined to 74.1 from the prior month's reading of 79.3, reaching a six-month low.

Financial stocks including Bank of America Corp (BAC +3.13%) and Citigroup Inc (C +1.43%) rose. Investors cheered reports that major central banks are preparing a coordinated action to provide liquidity in an effort to improve lending conditions. The Federal Reserve Board meets next Tuesday and Wednesday.  

On the M&A front, Microsoft Corp (MSFT +2.32%) rose after the company announced it would acquire software maker Yammer in a $1.2 billion deal. Chevron Corp (CVX +2.36%) gained ground while crude oil prices oscillated on Friday before ending with an incremental gain only pennies above $84 per barrel.

With investors focused on hopes of stimulus measures, the latest batch of weak economic data was overlooked and stocks rallied on Friday. To repeat a remark from Thursday evening's commentary, "Regardless of the reasons pundits may point to for why stocks rose, it was an encouraging sign to see the market shake off negative news."  Stocks rallying in the face of negative news can be viewed as a sign of a bullish market environment.

In bondland, Treasuries extended their weekly advance with the 10-year note up 18/32 to yield 1.58% and the 30-year added on over a full point to yield 2.69%.

Technically, the major averages (M criteria) have confirmed a new rally attempt and fact-based investors may carefully begin with new buying efforts strictly in sound buy candidates near proper entry points. Any distribution days immediately afterward could quickly destroy a new rally. As always, disciplined investors limit losses if any stock ever falls more than -7% from its purchase price. 

The Q2 2012 Webcast is scheduled for Wednesday, June 27th at 8PM EST and will be available "ON DEMAND" afterward.  All who have the UPGRADED membership now get access to these informative *Quarterly Webcasts included at no additional cost. (*Previously sold separately at $99 per webcast.)  Links to archived webcasts and all prior reports are on the Premium Member Homepage. Please use the inquiry form to submit any questions that you would like to see answered in the upcoming webcast or to make any suggestions or comments about our website and services. Thank you!

PICTURED: The Nasdaq Composite Index's gain of +1.29% on higher (and above average) volume on Day 10 of the rally effort, coupled with an expansion in the new highs lists, may be considered a reasonable follow-through day confirming a new rally. The tech-heavy index's ability to clear near-term technical hurdles would be very reassuring signs for the rally and it would provide more encouragement for investors to increase their stock market exposure. In the days ahead we will watch very closely as it challenges recent highs and its downward sloping 50-day moving average (DMA) line.