Earnings Ahead, Records in Sight

But Roth warns that investors shouldn't take new highs to necessarily mean the start of a new phase of the rally. The recent gains are disconcerting because they're made on light trading volume. "This rally is a function of limited selling pressure, rather than increasing buying pressure," Roth says. Volume needs to improve, "or the market will roll over due to exhaustion."

The wait for earnings season "officially" ended after the closing bell Tuesday. Alcoa beat Wall Street expectations, reporting total earnings of 79 cents per share, vs. expectations for 76 cents. Revenue was stronger than expected, and net income was up 9% in the first quarter. Alcoa was up 0.09% in Tuesday's session, and recently up 1.4% in postclose trading.

Alcoa's report is yet another feather in the economic bulls' camp, piling onto a better-than-expected jobs report last Friday and last month's better-than-expected revision to first quarter GDP.

"The drum roll continues," says John Bollinger, president of Bollinger Capital. "Every time you turn around there is news that is better than expected, and it carries stocks higher."

One report that was not better than expected, but probably not much worse either came from D.R. Horton(DHI Quote), which reported a 37% year-over-year drop in orders. Chief Executive Donald R. Horton warned that the spring selling season "has not gotten off to its usual strong start." D.R. Horton fell 1.5%.