In another week or two earnings season will be upon us again. And, oh, what a difference a year makes.

A year ago, earnings season was bank disaster season. Nothing mattered except how many tens of billions of dollars the major banks would announce they were writing off for bad subprime investments. Quarter after quarter, the write-offs accumulated. Each one depleted bank capital, until after four or five quarters of it there just wasn't any capital left.

The banks found themselves in the same position that their customers are usually in: You can only qualify for a loan if you don't need one. So it was with capital for the banks. They couldn't raise any, because they needed it so desperately.

It all changed in early March, when Citibank announced it was in the midst of a great quarter. Then the Treasury announced it would backstop banks' capital requirements if they couldn't raise what they needed in regular markets.

And bingo -- suddenly the banks could raise money again, and they did.

That restored confidence. Ever since then the banks, by and large, have been reporting real earnings again -- not losses driven by write-offs. More of the same is expected for this coming earnings season. There's so much optimism about banks, consensus earnings estimates are being upgraded now at nearly a 57.8% annual rate for the sector.

That's not the only group analysts are optimistic about. On average, across the Standard & Poor s 500 index, consensus earnings are currently being upgraded at a 41.4% annual rate. There's not a single sector where forecasted earnings are falling. Bringing up the rear is the telecom sector, where estimates are being upgraded at about a 6.5% annual rate. Time was, a number like that -- now the weakest of all the sectors -- would have been considered pretty strong.

In the lead is the materials sector -- the one that includes metals, chemicals, paper, fertilizer and so on. Earnings there are being upgraded at a mind-blowing 126.8% annual rate. And that's on top of a 77% earnings rebound for the sector since the trough in earnings in May, 2009.

With earnings estimates being upgraded this aggressively, no wonder stocks have staged the strongest rally since 1935 -- from the March 2009 bottom, up 68.8% in 304 days. That's history being made right before our eyes.

There's just no question about it. The recession is over. We are in a real, live recovery. As strong as earnings upgrades look, and as strong as the stock market has been, so far it hasn't translated into very spectacular growth in the overall economy, or in the jobs market. They're just beginning to pick themselves off the floor.

Why? Because earnings estimates are forward-looking. The stock market is forward-looking. All the economic statistics, like gross domestic product and employment, are backward-looking, or at best contemporaneous.

So be patient. The economy will get moving at some point here. But from an investment standpoint, that's not necessarily a cause for optimism. Remember, the expectations for recovery are already baked into the earnings estimates, and already baked into stock prices.

So when the backward-looking evidence of economic growth starts making itself obvious, that doesn't necessarily mean that stocks will celebrate with another big leg up in this new bull market. Why should there be one? At that point, all that will have happened is that the backward-looking statistics will have validated precisely what the forward-looking earnings and stock prices were predicting.

For stock prices to move higher, earnings forecasts will have to move higher. And for that to happen, expectations will have to stay out ahead of reality. As reality improves, the expectations will have to improve even more. Can that happen? Sure, but it's getting to be a tall order.

It's easy to have a lot of growth when everything's been completely wiped out. Take the materials sector, the one where the earnings estimate growth is the highest. Earnings estimates for the sector were at all-time highs in September, 2008. From there, they fell 66% in just eight horrific months, bottoming in May, 2009. Since then, they've rallied 77%. Doesn't that mean that they've moved to all-time highs? Nope.

When you fall 66% from $34.1 billion that takes you to $11.6 billion. From there, when you rally 77%, it only gets you to $20.6 billion. It would take another 66% rise, on top of the 77% we've already seen, to get back to $34.1 billion.

Them are the numbers. Read it and weep.

You could always take a glass half-full approach to this, licking your chops at the 66% gain in earnings still to be had. That should translate into a nice move in the stocks in the sector. By the way, the sector gained 28.5% from May 2009 to now, making it the second-best performing sector in the S&P 500 over that period.

Or you could take a glass half-empty approach. You could say $9 billion in earnings growth was 77%, and that got you 28.5% in stock gains. So if we make it all the way back to the old earnings high of $34.1 billion, that will be only (only!) 66%, so the stock gains should be proportionately smaller. Call it 24.4%. That's still a nice return. But it took $9 billion to get 28.5%, and now it will take $13.5 billion -- a lot more! -- to get a smaller return of 24.4%.

Are you following these numbers? Do you see how the better things get, the harder it is so keep getting better still?

This is a very counterintuitive lesson. Everyone I talk to is crazy for stocks right now. They see the momentum -- just look, 68.8% in 304 days! -- and they feel it just has to keep going.

But think again. What was it that produced those spectacular results in the first place? Was it momentum? No. Just the contrary. It was an absolute wipe-out. It was fear. It was terror. It was the worst bear market since 1932. That's when you want to buy 'em. When stocks and earnings are plunging.

I haven't seen a lot of plunging lately. I've been wrong about this for a while, I admit. But I still think stocks are due for a rest. With earnings expectations having grown as quickly as they have, this coming earnings season may be a big disappointment that will trigger the correction I've been waiting for.

Remember, at this point, with expectations as high as they are, earnings are going to have to absolutely knock the cover off the ball. Only home runs will do. Is that a bet you want to make? Not me.