Tax implications favor profit holding until next year. Why would the "buy and hold crowd" sell now (take profits) and pay taxes on those gains in April 04, when they can wait a couple of weeks and pay taxes on the gains in April 05?
with the newly reduced tax rates, investors will try to hang on to a winning position taken on in 2Q03 and will want to exit losing positions before they go long term. that could lead to strong performers performing better and losing stocks (not that many this year) performing worse. basically, the same traditional year-end effect, but perhaps a bit stronger than in the past. for those many investors who pay estimated taxes quarterly, the taxes can be delayed for a few months, but not a full year.