The firm is monitoring the New York Stock Exchange stocks only advance-decline line, which it says still needs to break out; the action in the Dow transports, which haven't confirmed the near-term highs for the overall Dow index; the KBW Bank Index, which has significantly outperformed in 2012, a trend that B of A thinks needs to continue; and the level of bearishness as measured by the Investors Intelligence survey with a reading below 20% seen as a sell signal. Meantime, earnings season is upon us and could tell the tale. Expectations are low with analysts are expecting the companies in the S&P 500 to post year-over-year growth of around 3%, down from growth of 9.2% in the fourth quarter, according to Thomson Reuters. Take Apple ( AAPL) out of the equation, and that drops down to 1.8%. With such a modest bar to clear, the stage may seem like it's set for corporations to outperform and send stocks even higher. But the possibility of that scenario playing out has to be balanced against the significant appreciation that equities have already enjoyed. Many of the best-performing stocks this year were the biggest duds of 2011, and the bargain hunting can only carry the market so far. If 2012's rally isn't going to stall, stocks may have to actually earn it from here. The banks will start setting the tone later this week with JPMorgan Chase ( JPM) opening its books before Friday's opening bell. Bank of America ( BAC), up more than 50% and the biggest percentage gainer in the Dow in 2012, will follow on April 19. BMO Capital previewed its expectations for the sector on Tuesday and it sees some cause for concern, especially given how far the financials have already run up in 2012. " W e believe that there are some downside risks to earnings as industry-wide loan growth appears to be falling well short of consensus projections for 1Q12, margins may be under additional pressure and deposit service charges may disappoint," the firm said, adding later: "We would expect to see somewhat of a pullback in the group during 1Q earnings season based on the aforementioned risks and given that we believe valuations have gotten a little ahead of bank fundamentals in the near term."