Retailers report tomorrow and an upside surprise possible. We will get the bulk of October retail same store sales tomorrow, and likely some updated fourth quarter guidance from a handful of retailers.

Key points:

1) Sales estimates for October have been revised UPWARD throughout the whole month. There is now likelihood that the retail universe will report a 2.0 percent gain for the month, which would be the single largest monthly same store sales increase dating all the way back to June 2008, according to Retail Metrics.

2) Comps are MUCH EASIER because October 2008 was a disaster;

3) Cooler temperatures later in the month a big help;

4) Generally more positive news on the economy and more positive comments from retailers in general.

And now the bad news: the Retail Index (RLX) was at a new high just last week, so the Street is anticipating good bottom-line reports for the third quarter. "The market now needs to see evidence of accelerating top-line growth, in our view," Morgan Stanley said in a note this morning.

That is what we need to hear tomorrow.

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