Even if the economy has an anemic recovery, corporate earnings are poised to surge in the second half of 2008. Third quarter earnings should rise by 30% and fourth-quarter earnings should rise by an amazing 70%. This will be the strongest earnings growth for the S&P 500 in decades.

I know what you are thinking, "How can earnings surge so dramatically when it's not yet clear how strong the recovery will be?" Well, it's not that difficult to explain. The reason is because the massive write-downs due to the credit crisis started in the third quarter peaked with the fourth quarter. As a result, the year-over-year earnings comparisons will be very favorable even if the economy still isn't growing strongly.

There are five major factors working to help the future earnings environment:

• The current trough in corporate earnings
• We're near the end of the Fed's interest rate cuts
• There's a near record amount of cash on the sidelines
• Corporate buy backs are relentless
• The market typically rallies heading into a presidential election

Even the "sell in May and go away" crowd doesn't seem to be worried about the stock market. The reason is that this phenomenon often doesn't apply in a presidential election year.

The catalyst for selling in May and going away is often caused by big gains early in the year. Traders then sit on their gains until the end of the year, so they can collect a big year-end bonus. So the stronger the start to the year, the bigger problem that sell in May and go away can be for investors. Since this year got off to a bad start and we're in an election year, I'm not worried about investors selling in May and going away this year.