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"The intermediate-term positive trends remain largely in effect," says options and trading expert Larry McMillan. In his The Daily Strategist, he offers his market forecast and some trades

"The intermediate-term uptrend line around 870-880 in the S&P 500 index remains intact; and as long as this is the case the return to the bear case will be tough to make. 

"Asset allocation trends continue to behave in a similar fashion, where industrial metals and energy commodities have maintained their respective uptrends and this is positive from an intermediate-term standpoint. 

KLA-Tencor (KLAC) posted revenue for its fiscal third quarter ended March 31 of $310 million, down 22% sequentially and 49% year over year, but ahead of the Street consensus at $300 million. The company reported a non-GAAP loss in the quarter of 34 cents a share, worse than the Street consensus loss estimate of 26 cents.

On a conference call with the Street this afternoon, the company said it sees Q4 revenue of $270 million to $310 million, with a non-GAAP loss of 8-24 cents a share. The Street has been expecting $290 million and a loss of 21 cents.

Oppenheimer analyst Gary Hsueh this morning turned bullish on the semiconductor equipment sector, anticipating an inflection point in demand in Q2 or Q3. Hsueh made a number of moves on stocks in the sector this morning:

• Lam Research (LRCX) Upgraded to Outperform, with price target to $35, from $20.
• Matson (MTSN) Upgraded to Perform, from Underperform, price target, $2.
• Applied Materials (AMAT): Maintains Perform rating, target to $12, from $10.
• KLA Tencor (KLAC): Keeps Underperform rating, but ups target to $23, from $15.

KLA-Tencor (KLAC) this afternoon said that it response to depressed market conditions, it will cut its global workforce by another 10%. That’s in addition to a 15% cut announced in November. KLA said it intends to cut its quarterly operating expenses down to $140 million to $145 million, down from a previous target of $165 million to $170 million.

The semiconductor equipment company also will consolidate some facilities, require some forced time off and reduce employee stock purchase plan benefits.