The gears of recovery start grinding harder this week when Alcoa (AA) reports its third-quarter results, starting a six-week span that will tell investors how recession-battered companies are getting out of the trough. The aluminum maker is scheduled to release results Wednesday.

Our pundits continued to clash on the outlook and meaning of the upcoming earnings season, with bulls arguing that improvements and higher estimates herald the start of true recovery. The less rosy view is that profits will come from cost cuts, that spending is down, and that, well, there's no there there.

Societe Generale global strategist Albert Edwards offered a colorful metaphor for his view of a market rally that ignores economic rot. “Investors think this is a sweet spot, but it is in fact a putrid boil that has not been properly lanced,” he wrote Thursday. In his view, in a balance sheet recession, investors should expect frequent downturns when governments stop supplying stimulus money.

That's a bit harsh for Yardeni Research founder and chief economist Ed Yardeni, who wrote on Sept. 28 that the benchmark S&P 500 stock index has soared more than 50% from its March low and that all of the 10 sectors and 131 industries have risen.

"We don’t believe that it has been a sucker’s rally, but rather a relief rally. However, it is show-time for earnings," he wrote.

Data cruncher Ed Hyman, chief economist at ISI Group International, wrote Tuesday that the index of earnings revision, published by First Call, hit a 2009 high of 66.8%, a reading of "remarkable strength."

"This increase is a good omen for third-quarter earnings reports," he wrote, "and history strongly suggests higher readings for this index argue for better employment."

That hasn't happened yet. Friday's 9.8% unemployment rate for September matched a low set in June 1983, but the market remained fairly resilient. Jobless figures are nothing to shrug off, though, warned David Rosenberg, chief economist at Gluskin Sheff.

"The economists like to point out that employment lags the cycle. However, in a credit contraction, it is much more of a leading indicator than many believe," and the labor market is now "very soft," he wrote in a Thursday note.

"To close this gap and return the labor market to pre-recession conditions by September of 2011, employment would have to increase by an average of 538,000 jobs every month between now and then," Economic Policy Institute economist Heidi Shierholz wrote Friday. "Thanks to the recovery act, we have stepped back from the abyss and losses are moderating. But the hole in the labor market is now so huge that it will require enormous, sustained levels of growth to fill it any time soon."

The ongoing weakness could mean that the recent rally – one fueled by investors anxious to get back into a down market – won't continue on an undifferentiated basis. In other words, it's time to start stock picking. This earnings season will offer some vital insight into which companies will thrive.

Richard Ross, global technical strategist at Auerbach Grayson, wrote Thursday that there will be upside, despite a choppy path to a tepid recovery.

"In poker, beginners rely upon luck, while expert players use their skills to minimize losses on bad hands and maximize profits on big hands," he said, adding that "now is not the time to leave the table, but rather the time to change gears and adjust your play accordingly.”

"Experts play 'solid' poker; conservative when entering a pot (market), but aggressive after entry,” Ross said. “The same holds true in trading. As the rising tide from the March bottom recedes, this has become an expert’s tape which strongly favors skill over luck."

As the quarter's performance is dealt out over the coming earnings season, investors should consider their cards, how to play their hands and how much of their stakes to risk.