The market seems to be finding the silver lining in some weak economic numbers this morning. The Chicago Purchasing Manager Index came in at 34.1 in December. This is a pretty low number, but slightly higher than expected, and it also represents the 5th consecutive monthly increase in the reading.

In housing, the October Case-Shiller Home Price Index showed a drop of -18%, generally in-line with expectations. Nonetheless, the housing index is currently ralling +1.65%.

Seperately, the number of companies asking and receiving money from the TARP plan continues to grow. The U.S. Treasury will purchase $5 billion in senior preferred equity from auto financing unit GMAC, and lend up to $1 billion to General Motors (GM) to participate in GMAC's rights offering.

Oil prices rose above $40 yesterday, but are back below $39 today, despite continued tension in the Middle East. This is likely a reflection of the weak demand picture globally for oil. Six months ago this news would have pushed oil skyrocketing higher.

Asian markets were mixed overnight. The dollar is lower so far, but gold is down also. The 10-year yield is up slightly to 2.12%. And the VIX is down a bit to 43.5.

Trading comment: The put/call ratios are still too low for my taste. The ISEE closed at 206 yesterday (the p/c equivalent of 0.48), a new 52-week high. This likely means the market could take a hit in the near future.

For now, year-end buying might trump the put/call, that is if big funds decide to put some cash to work. But after putting some cash to work last week, I am in no hurry to invest more on the long-side until I see more signs of stabilization. The first sign I would like to see is the S&P 500 recapturing its 50-day average (near 888).

long SSO