Last week, second quarter earnings reports that continued to surpass analyst projections carried the major stock market indices to their highest levels of the year. Only the Nasdaq, reacting to less favorable quarterly reports from Microsoft and Amazon on Friday, reversed its upward trend.

As second quarter earnings season rolls into its third big week, investors are likely to focus on the reports of large media, oil, and insurance companies. Three quarters of companies that have already reported have exceeded earnings forecasts, although revenues, compared to the same quarter last year, are down. But more of the same not-so-bad-as-expected news may not be enough to sustain the current level of investors' enthusiasm and accompanying stock market rally.

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Dr. Adrian Manz's live trading room is open to new customers this week. Upon agreeing to the live trading room's rules and answering a few background questions, you will be granted access to the online room. No anonymous trial memberships can be granted. Join here.
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On Monday, new home sales for June will be released. Data is expected to show an annual pace of 350,000 units, an 8000-unit increase over May's figures.

But other economic data will be less positive. The Conference Board's July consumer confidence index, to be released on Tuesday, is forecast to decline slightly from June in response to concerns over unemployment and slumping home values. A decline is also expected in Durable Goods Orders, due on Wednesday. And on Thursday, initial jobless benefits claims are anticipated to rise once again.

On Friday, the Gross Domestic Product data will likely disclose that the U.S. economy has contracted for the fourth consecutive quarter, the only time that has happened in the 47 years that quarterly data has been kept. Still, analysts predict that the second half of the year could show positive growth and an end to the current recession.

Also next week, U.S. Treasury yields will be of interest as the government plans to sell a record $115 billion in debt. Wall Street will be interested, too, in what Federal Reserve Chairman Ben Bernanke has to say about the Fed's role in the economic recovery. He will appear in a town hall-style forum, to be broadcast on PBS next week.

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Free Trial to Adrian Manz's Live Trading Room

Dr. Adrian Manz's live trading room is open to new customers this week. Upon agreeing to the live trading room's rules and answering a few background questions, you will be granted access to the online room. No anonymous trial memberships can be granted. Join here.
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7 Stocks to Watch

We have seven stocks this week at daily resistance looking to break to new highs. Those seven stocks to watch are Becton, Dickinson and Co. (BDX), Costco Wholesale Corporation (COST), Danaher Corporation (DHR), Dell Inc. (DELL), Humana Inc. (HUM), Sigma-Aldrich Corporation (SIAL), and WellPoint, Inc. (WLP).

Dave Mecklenburg is the Editor-in-Chief of TigerSharkTrading.com.