Here comes another earnings season, and it's already started out with something of bang. Each quarter Alcoa (AA) is always the first to announce earnings, and its report after the close on Wednesday was spectacular -- earnings were more than twice what was expected.

Alcoa's top line was a positive surprise, too, with revenues beating expectations. If Alcoa is a bellwether for the whole Standard & Poor’s 500, then that could be very significant. Last quarter the average company beat earnings expectations by about 15%, the biggest upside surprise in more than two years. But the average disappointed on the top line, with revenues coming in 2% below expectations.

So the story was that companies were able to generate net income by cost-cutting -- their businesses weren't really fundamentally expanding. If they were, we'd see top-line growth. Maybe, with Alcoa's surprise, we are now.

Yet there's something nagging at me about this. While I believe that we saw a durable bottom for stocks in March, I nevertheless think the fantastic, nearly-uninterrupted rally we've had since then has been too much, too fast. As I wrote here a month ago, I think we might be in for a correction as investors "sell on the news" -- that is, cash in when all the big earnings surprises like Alcoa's come in, because it was the expectation of those surprises that caused the big rally in the first place.

Investors didn't exactly sell Alcoa on the news in Thursday's trading. The stock rose 1.1% on the day -- but that's not much given the apparent magnitude of the surprise. And Alcoa closed far from its highs of the day, achieved in a fit of exuberance right at the opening, with the stock 6.4% higher. Ouch, if you bought the opening. That's what happens when you "buy on the news" instead of selling.

There's another thing that's a little worrisome. Maybe Alcoa's big surprise isn't going to generalize to other stocks. After all, Alcoa's earnings and revenues are driven by commodity prices -- and commodity prices have been on an inflationary rebound led by gold surging to new all-time highs above $1,050 an ounce. What about all the hundreds of companies who don’t have that wind at their backs?

It could be that many companies, even if their earnings show sequential quarter-over-quarter improvement, nevertheless won't generate the kind of upside surprise that can sustain continued upward momentum in stock prices. After all, consensus forward earnings expectations for the S&P 500 have risen by more than 8% over the last quarter. That's more than they typically rise over an entire year, compressed in a single quarter. So the S&P 500 companies will have to jump a very high hurdle to generate an upside surprise.

Gold making new all-time highs raises other difficult issues as well. I believe it's a strong indicator of future inflation, and inflation is a very dangerous thing. Sure, after the deflation we've experienced during the recession and credit crisis, a little inflation is just the medicine we need. It's a good thing. But a little bit of that medicine is all we need. And with gold at new highs, that means we're going to get a lot of medicine, and not a little.

This is something I've been writing about here for a long time, most recently two weeks ago when gold broke through $1,000. Believe me on this -- don't make the mistake of thinking that serious inflation can't happen. If you believe that, then you're probably too young to remember the 1960s, 1970s and early 1980s when, at the worst of it, this country experienced inflation as high as 14.5%.