December definitely was a month to remember for the U.S. equity markets. Stocks finished up an ultra-volatile year on a high note, with monthly gains of about 6% in the major market averages.

The big gains in the final month turned 2010 into a better-than-average year for the markets. When the final year-end numbers were tabulated, the Dow had posted an 11.02% gain, while the S&P 500 jumped 12.78%. The NASDAQ Composite surged 16.91% for the year, while the small-cap Russell 2000 Index soared 25.31%.

I must say that I was surprised about just how strong stocks finished the year. Admittedly, I’ve been very cautious about the market’s ability to post such powerful gains. Now, however, I’m seeing plenty of reasons to be bullish in 2011.

What are those reasons?

Well, improved economic metrics like ramped-up consumer spending, improved factory orders from businesses, better consumer confidence and even an improvement in the employment picture are helping to fuel this market.

Then there’s the tax compromise reached by President Obama and Congress, which I suspect will help boost economic growth significantly. You see, the tax deal allows for either full or partial expensing of capital expenditures in 2011. This could be a huge boost to investment spending by businesses, as they can write off big purchases in 2011 rather than just depreciating the cost.

This is particularly significant in the technology field, as many U.S.-based firms have been very reticent to upgrade or purchase new equipment since the recession began in 2008. As a result, there is significant pent-up demand for major capital expenditures. If you combine strong, pent-up demand with favorable tax rules, you get economic rocket fuel that’s ready to ignite the economy.

Of course, there are plenty of other reasons why I think stocks are in for a continued run higher in 2011, and I’ve detailed those reasons in the latest issue of my Successful Investing newsletter. If you’d like to find out more about why stocks are likely to go higher, and which sectors are best for your portfolio, click here.