HNY: Stocks Start 2010 On A Positive Note

Stocks got off to a strong start in early trading, with some positive economic reports driving the bullishness. Thursday's late day selloff looks like it was just some sort of sell program by someone who successfully took advantage of the thin trading.

The ISM Manufacturing Index came in at 55.9 for December, which is higher than the 53.6 reading from November. The report follows two similar positive datapoints out of China and the UK, that both showed increased factory production in those countries.

Commodities are very strong this morning, as the dollar slips. Oil is trading above $81, while gold prices have spiked above $1120. The IMF issued a forecast that commodity prices are expected to rise this year as the global economy expands in 2010.

Among the sector ETFs, energy and materials are leading the upside (+2.7%), while consumer staples are lagging (+0.8%). But all sectors and indexes are nicely higher so far. The emerging markets etf (EEM) has also gapped to a new high this morning.

The 10-year yield is flatting near 3.82%, and the VIX is -4% lower to 20.72 following that large spike higher on the last trading day of the year.

Trading comment: No change to my near-term thesis. Today's rally is likely new money coming in at the beginning of the year and being put to work. I remain in dip buying mode in here. The market is slightly overbought, so I don't want to chase today's spike higher.