Countless small companies are reporting their earnings now and, unscientifically, I can tell you that, in most cases, expectations are being met. But, like the large-cap stocks, there aren’t that many home runs out there on the earnings front. This is mostly due to tempered visibility for upcoming quarters. The earnings power this year will continue to be with large-caps, which is why the main stock market averages can keep ticking higher over the coming quarters, even though they’ve already gone up substantially since last summer.

This is a market that’s trading off solid first-quarter earnings, a relaxation of sovereign debt worries in Europe (which doesn’t mean the threat is over), and mergers and acquisition news. Big companies are sitting on huge cash hoards, and the only way to put that money to work is to buy back shares and buy other companies. Large corporations are doing both right now and this is helping to maintain positive investor sentiment. In fact, investment banks are salivating.

The rollercoaster in commodity prices is totally expected and called for. The speculative boom in commodity futures is both real and part of a bandwagon effect, but the action in this asset class isn’t going away. Real resources will continue to boom throughout the year and this is based on global fundamentals, the weather, and speculators.

While both stocks and commodities are due for corrections, the trading action in stocks suggests to me that more incremental gains are likely. The Dow Jones Transportation Average, which is one of the most important gauges for the broader market, looked like it was breaking down in February and March, but has since recovered and is maintaining its upward momentum. With most of the big railroad stocks trading at all-time highs (not 52-week), this leading indicator is saying that it’s full steam ahead for equities.

The right shoulder formation of the S&P 500 Index is becoming more and more complete every week and I think it’s highly likely that it will be complete within the next 12 months. Technically, this index would have to surpass 1,500 in order to get to the same level it was in 2000. That was 11 years ago—and all the stock market’s done since then is convulse. As always, if you’re on the right side of the trend, you’re making money. The buy-and-hold strategy in large-caps failed over the last 11 years and investors are only slightly ahead due to dividend payments. Frankly, we would have all been better off just buying gold bars. That would have saved a lot of headaches.

We’re in a market of incremental returns, where investors are trading on news without a big catalyst. This trading action should stay with us for a while, at least until second-quarter earnings season begins. There aren’t any big tailwinds, but there doesn’t seem to be much in the way of headwinds either. It’s low and slow, just like the economy.