Markets Get A Boost In Early Trading

The markets staged a nice turnaround yesterday, and are following through with a bounce in early trading today. The question I am wondering is, was yesterday's bottom the low for the rest of the year? Meaning, is the market set for a Santa Claus rally now? I think so.

Morgan Stanley (MS) reported much worse earnings than expected this morning, due to a bigger writedown of bad mortgage loans. But the stock is actually higher, which is more important. The company also got a $5 billion investment from China Investment Corp, which should help its capital situation.

This news seems to be trumping the poor earnings announcements from Darden Restaurants (DRI) and homebuilder Hovnanian (HOV).

Asian markets were mixed overnight, but the ETFs are higher this morning. Oil is trading back above $90, which is helping the energy complex. And the 10-year yield is steady at 4.14%.

The VIX is falling again, back below its 50-day average. This is a good sign, but it would really be positive to see it get back below the 20 level. It is currently at 21.50. Stay tuned.