(By Rich Bieglmeier) What the heck did Monday's trading session do? nothing, absolutely nothing. The indexes finished flat on holiday like volume. It was as if the market makers were on strike or something. There is nothing to add to our outlook from the i On the Market.
Limp volume is likely to be replaced by something more robust on Tuesday and Wednesday as traders gear up for Ben Bernanke's decision on Wednesday afternoon – remember that nearly 50% of the market's gains since the mid-90s occurred within the 24 hour window ending with the 2:15 pm eastern announcement.
Before the market opens on the 31st of July, Personal Income and Outlays results will be released. Wall Street expects income to be up 0.4%, and spending to increase by a slight 0.1%. The truth is, traders will be more focused on the spending side of this report. Based on the recent GDP numbers, iStock wouldn't be surprised to see a slight, spending disappointment before the morning bell.
With the market closing last week like the French relay swim team, a few new sectors made our buy lists. Investors might consider beverage stocks, especially soft drinks and brewers. Waste disposal, heavy construction, and insurance brokers look buyable too.
iStock will have our full sector review on the site tomorrow morning and a stock idea or two from the bull lists. Make sure you stop by.
Investors who are attracted to stocks under $1 might consider Cosi Inc. (COSI). On Monday, we wrote about insiders buying the stock a few months after partnering with an industry turnaround specialist. Beyond connecting the dots, we just have that gut feel something good is about to happen here. Read the story and see what you think.
Finally, as we mentioned up top, stocks have a tremendous track record of buying the hype heading into FOMC announcements. Aggressive traders might think about adding a leveraged index ETF like Direxion Daily S&P500 Bull 3X Shares (SPXL). The fund's objective is to return 300% of the daily returns of the S&P 500.
If history holds true and the index gains 0.48% from 2:15 pm Tuesday to 2:15 pm Wednesday, then investors could make up to 1.5% in a day. Do that eight times a year, and you could make nearly 12% by being in the market only 3% of the available trading days.