The potential for the first down day in the first trading day of the year since 2007 has some traders nervous, but don't make too much of it.
First, China was an issue even before we opened. Chinese PMI was a disappointment, and we see emerging market countries like China, , India, and Brazil all weak today. The new export components of the PMI were weak in China and South Korea; all that is closely tied to global trade.
As further proof that China is an issue, look at the action in copper today. Copper had a terrible year, but it made an attempt to rally into the end of 2013. It is one of the few metals down today.
China is by no means out of the woods, and its markets reflect that concern. We have all-time highs in the U.S. markets, and Germany is near an all-time high as well. Japan is at a six-year high, but China's stock market is still 65 percent below its 2007 all-time high.
And don't believe the people who tell you that traders are just buying last year's losers and selling the winners. Emerging Markets (EEM) was a loser last year, and it's still a loser, down 3.5 percent today. Steel stocks (SLX) did nothing last year, they are doing nothing today. Tobacco stocks (TOB) were a loser last year, they're a loser today. Home Construction stocks (ITB) underperformed last year, they are underperforming again today. The one exception is gold stocks….down 50% last year, we are seeing some buying today.
Here in the U.S., economic data today was strong: U.S. January ISM showed excellent numbers for new orders, production, and employment.
Finally, a little bit of advice: Volume is only moderate today. Don't over-read the action. Sure, some are taking profits, but it's nothing titanic. Some asset allocators may be putting a little more money into beaten-up bond funds, but it is no tidal wave. The way the calendar is set, it's likely more new money will come in next week.
—By CNBC's Bob Pisani