Our latest rally has been driven by earnings. Both good earnings and bad earnings. The good earnings have come from companies pulling in profits from overseas markets and benefiting from exchanging those profits into the weak dollar. The bad earnings have come from financial stocks. With financials, its "If you're not going bankrupt, then it was a great quarter" and the stock trades higher. But once these earnings wrap up, we'll be left with economic data and the Fed. And from what many large US companies have been telling us from their guidance is that things aren't looking great. Will those correlate through to economic data? Probably. Will it affect what the Fed is going to do? Maybe.
The bottom line is that once volatile earnings season is finished, we have to come back to economic reality. We can't rely on a good report from Google to spur a 300 point rally. Many are saying the worst of the credit crisis is behind us, and that may be true, but lets not forget about the consumer, and the affect they have on the economy.