The problem is there's something that smells funny about both these explanations. Supply and demand certainly makes sense, but this fast? Oil was $100 in August. It dropped 50 percent in 5 months, because supply was suddenly stronger?
I understand all the people who feel that manipulation of the oil market by nefarious traders must be a factor in this drop. I do understand their feeling, but I don't think that's the primary factory.
I think the primary factor was a dramatic change in rhetoric from Saudi Arabia. The leadership made it clear it was not going to support the price. There is a global shift in production, and Saudi Arabia is not going to cut output. That shifted everyone's thinking.
Read MoreSupply may not be oil's only problem: Lloyd Blankfein
One thing's for sure: This isn't 2008, when we saw oil go from $145 to $35, a 75-percent drop. It certainly isn't driven by a weak U.S. economy. Consumer confidence is stronger, and the job market is too.
With oil stabilizing and bond yields up, two of three macro drags have reversed. Only the euro remains weak. But markets are so oversold that two out of three is enough for a rally in Europe and the U.S., at least at the open.
I said yesterday that for the markets to stabilize we would need oil to stabilize, but we also need to change the conversation toward the improving U.S. economy. Two pieces of news on that front:
1) JC Penney reported a 3.7-percent rise in same-store sales for the holiday season, and also gave a fourth quarter sales projection at the upper end of its previously projected range of 2 to 4 percent. That is a big improvement from the third quarter, when sales were flat, and a lot better than expected. Many were expecting sales to be flat to up 1 percent.
Read MoreADP: US private sector created 241,000 jobs in Dec vs 226,000 expected
Given the stock is down more than 30 percent since October, and that this is one of the most shorted stocks in the retail space (35 percent of the float is shorted), it should see a bounce today, as should most of the department stores.
We will get other reports in the next day or so from other retailers, including Barnes and Noble, American Eagle, Pier One, Signet Jewelers, and Urban Outfitters. We may also hear from Macy's and Target. Tiffany, Gamestop, and Best Buy should report next week.
2) American Express was upgraded to "buy" at Goldman Sachs for several reasons: an improving economy (which could drive revenues up 7 percent), rising rates (many loans are floating rate), and loan growth (expected to be up 5 percent).
Disclosure: CNBC's parent NBCUniversal is a minority investor in Kensho.