Anyone else feel the market will pull back today and for a few days after that. It seems like everyone is drunk at this party and a hangover is is long overdue.
If you are long as most the world is and you are sitting on huge capital gains, why on God's green earth would you sell before Jan and give up 50% of your profit if you are in a high tax state and top federal bracket when you can sell in Jan and possibly have those gains offset by losses from a market pullback next year? It just makes no sense. THIS is why we see these end of year rallies. There just are no sellers to be found.
Don't forget that most people have been waiting for this pullback since about 900 ES! It will always go up over time. It has too. Don't fight those who control it, as you'll always lose. We certainly have LOTS higher to go over teh coming months/years. 30k on the dow for example.
It is somewhat hard to get a pullback during this season. Along the same lines, do you think the vix can pop up over 14 in the next 2 weeks. It is scraping the bottom. I am scaling in for a pop.
I am not talking about a correction,crash or bear market, just a few days of going down or a single few hundred point swish. The reason I have brought this up is indexes like the Dow and S&P are making new highs but the Russel, EMD and even the Nasdaq are not so hot today. It just seems like something is up.
I'm not sure I see the point of making additional comments once the definitive answer is on the table ... and it is. Why would I sell a stock at 50 that I bought at 35 a few days before I get my tax reprieve? Unless I'm pretty sure negative news is about to break (or I'm an imbecile) I wait the few trading days. Does this mean a break in the market is impossible? Of course not. But it is unlikely. I'm not an options guy (although I'm sure incorporating into my trading is a good idea) but maybe selling puts in up years on say Dec. 15th and picking up some of the premium that erodes might be a small winner. Bingo ... the answer is in Maverick's post.