Stocks Continue Steady Climb Higher, Defying September Jinx

Stocks are higher again in early trading, after putting in a very strong session yesterday. The market is again overbought, but that hasn't meant all that much recently. Each and every dip has been bought quickly by investment managers, many of whom are likely either underinvested or trailing their benchmarks and thus feeling performance anxiety.

In economic news, housing starts for August hit an annualized rate of 598,000, which was in-line with expectations. Also, initial jobless claims for the week fell to 545,000, which is below consensus of 557,000, so that's a small positive.

In corporate news, Oracle (ORCL) reported an in-line quarter, with revenues slightly light. The stock is trading lower on the news. Financials and materials are the leading sectors this morning, while staples and utilities are lagging for the second day.

Asian markets were higher overnight. The Bank of Japan kept interest rates at 0.1% and upgraded its view of their economy. But the central bank still sees downside risk and is expected to keep rates at low levels into 2011.

The dollar is mixed this morning, as are commodities. Oil is trading firm around $72.50, while gold is slightly lower today, but not by much ($1019). The 10-year yield is lower to 3.43%; and the VIX is lower again to 23.40.

Trading comment: Yesterday we took some profits on our gold etf and materials stocks. Our volatility etf has been under pressure since we bought it last week, but the VIX looks to be holding the 23 level. I also think bond yields have been holding and could see a brief pop, maybe on some of these Treasury auctions that look to increase in size in the near-term.

Other than that, being active trading around our individual stock positions has been good. There are a lot of stocks on the move, and if you take the time, there is no shortage of trading ideas out there. Good luck.

long TBT, VXX