Tax selling normally occurs in october and november so people can buy back the stock in November or December.
how about early january tax selling on good years (to delay capital gains for 1 yr) ? predictable after good years?
Thats right. All the stocks that topped out in December will be sold off in January so people can avoid paying taxes on those gains for another 16 months. Just go back and look at all the index and stock charts. You can see where there is some selling in the beginning of January. It might create an opportunity to go long or be the start of a much greater sell-off. If this was 2005, then I would say it would have been an opportunity. Since this is 2007, I am willing to bet that it will be the start of a larger correction. The tax selling in January will be the match that starts the fire that torches the house.
The last week of Dec is supposed to be a great week to buy based on funds doing their last minute disposal of last year's dogs. Of course, this depends on the stock. This week would typically be the last good week to sell this year, due to the Christmas effect. The thing I've never understood is... WHY the Christmas effect? WHY would anyone want to buy a bunch of stocks and then go away not to look at it thru the holidays... and knowing that the last week is typically a sell off (start your new purchases off with a loss). This one always puzzled me.
The larger investors/traders are supposed to go on vacation past Dec 15th. They are supposed to have completed their selling by then so they can spend time with their families. Then you are supposed to step in and buy buy buy. Then the investors are supposed to come back from vacation to buy. You then sell while they buy. However, these are new times. The old thinking may not apply...