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The market had a fairly strong rebound after starting the day weak with some disappointing economic data from jobless claims and retail sales. Yet, early losses were reversed after oil got slashed after a report that an Iran oil embargo will be delayed and reports came out that the weak August Philly Fed Index were revised to show a much better index number. The market has continued to bounce back from losses and bears have not been able to run the market like they have been hoping. Bulls are buying into earnings season as no one wants to miss a possible large move in the market.

Moving into tomorrow, we believe the market is setting up for a strong day if JPMorgan (JPM) can give us at least decent enough earnings to not slow down a rally. With a bullish tinge setting in for the market, what are two stocks with good upside from here?

Unknown ObjectTwo stocks that are looking very strong right now are News Corp. (NWSA) and Johnson Controls (JCI). The latter has earnings next week, and we are looking for good upside into those earnings. The stock broke its 200-day MA and has potential to $37 pre-earnings. The company is looking strong with EPS at 0.62 vs. 0.55 from one year ago. We believe that the auto parts industry is going to have a very nice quarter as the automotive industry continues to be resilient.

News Corp. is looking great technically after the Murdoch debacle. It has recovered completely and then some. The company has been stuck under $18 for a year, and it has broken out since breaking that level. It looks like it should continue higher from here.

We had another solid day. We closed sold $48 puts on Tempur-Pedic (TPX) that we got into in December for a 20% gain at 0.05 after 0.85 entry. We opened several positions including a long on Starbucks (SBUX) stock at the 47.40 level. We added a bear call spread and puts on AOL (AOL) as the company looked fairly weak moving into earnings and has run up on very limited news. We also bought $38 calls on JPMorgan (JPM) for an earnings play.

We have the following positions. In our Short-Term Equity Portfolio we are long Harley-Davidson (HOG) and Starbucks . In our Options Portfolio, we are long Blackstone (BX), Starbucks, Google (GOOG), Ultrashort Proshares QQQ (SQQQ), IBM (IBM), and Apple (AAPL) and we are short United States Oil (USO). In our Earnings Portfolio, we are long CarMax (KMX), Avis Budget (CAR), Vertex Pharma (VRTX), and Ashland (ASH). We are short Polycom (PLCM) and AOL.

Source: What's Next For The Market, And 2 Stocks With Upside

Additional disclosure: We have the following positions. In our Short-Term Equity Portfolio we are long Harley-Davidson (HOG) and Starbucks (SBUX). In our Options Portfolio, we are long Blackstone (BX), Starbucks (SBUX), Google (GOOG), Ultrashort Proshares QQQ (SQQQ), IBM (IBM), and Apple (AAPL) and we are short United States Oil (USO). In our Earnings Portfolio, we are long CarMax (KMX), Avis Budget (CAR), Vertex Pharma (VRTX), and Ashland (ASH). We are short Polycom (PLCM) and AOL (AOL).