Sam Allardyce praised his players for producing what he described as Sunderland's best display of the season during a 3-1 defeat to Arsenal at the Emirates Stadium on Saturday.
Allardyce's men showed how they have improved during his short reign but were undone by goals from Joel Campbell, Olivier Giroud and a late Aaron Ramsey finish.
A Giroud own-goal had cancelled out Campbell's opener as Sunderland looked on course to extend Arsenal's winless Premier League run to four matches despite the injury-enforced absences of Jermain Defoe, Lee Cattermole and Sebastian Larsson.
The visitors would likely have claimed a point with improved finishing - Fabio Borini and Patrick van Aanholt missing golden opportunities - although Allardyce remained positive afterwards.
"We could have won, never mind got a draw but we didn't because of our frailties in front of goal today," he said.
"We didn't score when we created chances to get in front and because we didn't score we've ended up losing. When we did have a chance to get a last-gasp equaliser, which I thought we deserved, unfortunately Patrick put it over the bar.
"It was a frustrating day but I'm encouraged by the performance, I'm just really sad for the players that they didn't have their shooting boots on.
"We've proven we can score goals and we really should have had two or three today. I've never been here with a team and created as many chances as today but we've still lost 3-1.
"It's coming together, the lads believe in themselves and are showing more of their ability, which is good from my point of view.
"The squad was tested today and stood up to that test. The team today probably gave, even though we lost, the best performance since I have been here.
"Like everything else, when you create this much at Arsenal you have to come away with something. That's what we should have done.
"The spirit's getting better, they believe in each other more. We exploited Arsenal's weaknesses very well apart from putting the ball in the back of the net."
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