It's fascinating to witness the equity markets go from panic to boom times in such a short period of time. It wasn't too long ago (just a couple of months) that the broad market averages were tumbling based on a credit crunch in the subprime sector of the mortgage market. Now, the S&P 500 and Dow Jones Industrial Average are hitting new record highs. What a year it's been!

Never before has the stock market got what it wanted so quickly. It was like a little kid at an ice cream store screaming for a cone. The Federal Reserve acquiesced very quickly with a half-point cut in the Fed Funds rate, but this didn't cause a rally in stocks. It only stopped the bleeding.

The stock market is much healthier now than it was just a few months ago. Things are back to normal in the sense that investors are buying stocks based on speculation, and are likely to sell on the news. Once again, the equity market wants more interest-rate cuts and it just might get them in the not-too-distant future.

So, the only way to keep things going is solid corporate earnings in the third quarter. Throw in another interest-rate cut and we've got the makings of an extended rally.

Traditionally, the second half of the year yields better numbers than the first half, with the fourth quarter being one of the strongest quarters of the year. With large-cap stocks continuing their leadership trend in this market, I don't think I'd bet against them.

It's a little early yet, but I can't wait to go over upcoming earnings results. Earnings season is always the best time to be looking for new investment opportunities in the stock market. I don't think I'll be disappointed this quarter.