Bulls Bid for Another Romp

During the first eight months of the year, the Federal Open Market Committee, the Fed's policymaking arm, convened five times, raising the fed funds target rate four times by a total of 100 basis points to 5.25%. Amid those rate hikes, the S&P 500 and the Nasdaq touched four-and-a-half year highs.

During August's FOMC meeting, the central bank elected to keep the rate unchanged, adding uncertainty about what it will do for the final three meetings of the year.

Pavlik says the market "will continue to watch for signs that inflation is moderating. The Fed has taken steps in accomplishing its goal of slowing down the U.S. economy and seeing that a so-called engineered soft landing or slowing the economy is occurring, as opposed to a hard landing or recession."

Getting Defensive

Hyman says the bond market is currently signaling a slowing economy. He also maintains that "oil prices could be the wild card for future forecasting of growth and inflation. We currently see the beginnings of a change in momentum players' beliefs of significantly higher prices for crude, gasoline [and] heating oil for the rest of the year."

Then there are the elections coming up in November, which have the potential to affect the strategies of traders.

"The midterm election cycle isn't a focus yet at all, but we'll turn attention to it in September," says Paul Nolte, director of investments with Hinsdale Associates. "It will be a test for the Republicans, as a Democratic Congress, from an investing perspective, brings gridlock to the market. Historically, markets take off when Republicans hold control of Congress. We'd like to take Washington out of the mix."

Considering, then, the potential influences, where can the money be made?