It's amazing what a new month and a couple pieces of better-than-expected economic data can do to investor sentiment. It's like we're in a whole new world.

Stocks are probable to trade to the upside over the next few weeks in anticipation of third-quarter earnings season. So far, Intel Corporation (NASDAQ/INTC) has been the only big-name company to preannounce any reduction in guidance (Intel didn't reduce its earnings forecast; just revised its total revenues a bit lower due to a slow environment for PC sales). Once earnings season comes, it will be another whole new reality for investors.

The good news for corporate earnings is the robust first half of the year. While the economy was in recession, big companies did a remarkable job of keeping their earnings mostly constant. This is the leverage that big business has with its operations. When sales go flat or go down, big companies try to squeeze every penny out of their expenses. Because they're so large, the numbers add up quickly. The result in the first half of this year was earnings generation that was truly impressive considering the lackluster economy.

Right now, we have a number of big industrial stocks hitting new 52-week highs in this market. Companies like Caterpillar Inc. (NYSE/CAT), Deere & Company (NYSE/DE) and E.I. du Pont de Nemours and Company (NYSE/DD), better known as DuPont, have put in bull market performances, largely due to the strength of their overseas operations. Asia in particular is adding to the bottom line.

But, a lot of other companies are not participating in the recent price strength. Companies like Microsoft Corporation (NASDAQ/MSFT), General Electric Company (NYSE/GE), Hewlett-Packard Company (NYSE/HPQ) and Alcoa Inc. (NYSE/AA) are all Dow stocks that are stuck in the doldrums. And so are the financials. For a sustainable bull market, we need technology, industrials and financials moving in the same direction with the same fervor. Because of the choppy recovery in the economy and the choppy trading action in stocks, a lot of individual investors aren't participating in this market. Investment risk is still high for market participants.

Third-quarter earnings season will be the confirmation that investors need. If earnings hold up and revenues grow, then I think it's probable we'll see a mini bull market until the end of the year.