I went out on a limb last week, and now it's time to see how that decision played out.

  • I predicted that Netflix (Nasdaq: NFLX) would close out the week with positive gains. Big mistake. Even though the company delivered better-than-expected earnings, the video service's uninspiring guidance calling for soft subscriber growth during the third quarter and an overall loss for the fourth quarter slammed the shares. I was wrong.
  • I predicted that the tech-heavy Nasdaq would outperform the Dow Jones Industrial Average. (INDEX: ^DJI). This was a consistent winning call during the first quarter, but it's been hit or miss during the past few months. The market wasn't doing too well heading into the final trading day of the week, but Friday's surge helped. The Dow clocked in with a gain of nearly 2%, and the Nasdaq managed to inch 1.1% higher. I was wrong.
  • My final call was for Whole Foods Market (Nasdaq: WFM) to beat what Wall Street analysts were forecasting on the bottom line in its latest quarter. The organic grocer has been landing just ahead of where Wall Street's expectations are perched over the past year. Well, Whole Foods didn't let me down. A profit of $0.63 a share surpassed the $0.61 that analysts were forecasting. I was right.

One out of three? I know I can do better than that.

Let me once again whip out my trusty, dusty, and occasionally accurate crystal ball to make three calls that may play out over the next few trading days.

1. Sourcefire will close higher on Wednesday
It's easier to bet for Sourcefire (Nasdaq: FIRE) than against it. The cybersecurity security specialist has been keeping companies, agencies, and shareholders safe. Yes, shareholders. Sourcefire has beaten analyst estimates by 27% or better every single quarter over the past year, and it's reporting again on Tuesday after the market close. The smart money has to be on another strong quarter, despite the many tech implosions the market has experienced this earnings season.

A strong report on Tuesday night should lead to a positive return on Wednesday.

2.The Nasdaq Composite will beat the Dow this week 
Betting on tech over stodgy blue chips was a steady winning bet for me earlier this year. This has been a losing bet lately, but I still think technology is the best sector to be for now.

I'm going to stick with this pick. Most of the names in the composite are just too cheap at this point. The market is also ripe for tech-stacked secondary stocks to continue to outpace the 30 mega-caps that make up the Dow Jones Industrial Average.

3. Liquidity Services will beat Wall Street's earnings estimates
Some stocks are just flat-out better than others.

Liquidity Services (Nasdaq: LQDT) offers up online auction marketplaces for surplus and salvage assets. The name probably doesn't ring a bell, but that's because the company's business isn't exactly consumer-facing. Liquidity Services caters to corporations and government agencies that have surplus inventory and salvage assets to unload.

Another thing it does is make analysts look like perpetual underachievers. If analysts say that the company earned $0.47 a share in its latest quarter, I'll whip out a "greater than" sign. History's on my side!

One of my best tricks to beating the market is finding stocks that perpetually land ahead of the prognosticators. Let's go over the past year of earnings reports.

Quarter EPS Estimate EPS Surprise
Q3 2011 $0.20 $0.26 30%
Q4 2011 $0.19 $0.20 5%
Q1 2012 $0.27 $0.37 37%
Q2 2012 $0.37 $0.52 41%

Source: Thomson Reuters.

Things can change, of course. Companies and government agencies can learn to manage their assets better, and there will always be the fear that someone can beat Liquidity Services at its own game.

However, there are no signs that the company will fumble this quarter to the point of failing to live up to Wall Street estimates. Everything still seems to be falling into place for another strong quarter on the bottom line.

Three for the road
Well, there are three predictions right there. Let's see how I fare this week.

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