Important Earnings Tomorrow (7/20)

Today (7/19) the markets bounced back much stronger than I anticipated yesterday. This is because the market decided to pop the champagne cork to Bernanke's testimony today. Even though the core CPI came out higher than expected, Bernanke commented that he expects inflation to retreat due to a slow-down in the economy. It seems like the current upward bias in the market welcomed Bernanke's comment on moderating inflation, but missed out on why that may be: a recession? The Dow is near its 50-day MA and I don't expect it to break above that resistance. With major earnings being released tomorrow (Ford, Google, Pfizer, Microsoft...), it will be interesting to see whether equities will continue their rally. Looking at Microsoft, I expect tomorrow's earnings (after market close) to help confirm whether there is a head and shoulders bottom. Strong earnings and a break above the neckline would be a confirmation, and it should be accompanied by heavy volume. But given the current bear market, there is a chance that it may turn out to be a failed head and shoulders.

Rec: Long MSFT (Stop at 22.2)