Traders have been wondering for the past couple weeks if a bout of selling would hit before the end of the year. This morning there finally is some downside pressure but it looks more like many market players are tired at this point and not willing to keep chasing the indices higher.
There is a general belief that market players will forego selling in order to delay tax consequences but that impact tends to be overestimated. There are trillions in pension plays, 401ks and other vehicles that are not impacted by tax planning.
In addition, the delay in tax consequences is not a full year but just until the next estimated tax payment is due in a matter of months. With interest rates low and the potential risk of higher taxes at some point there isn't that great of a motivation to delay claiming gains.
I'll be looking for some pullbacks in recent favorites to offer some entry points as this positioning action continues. A few that I'm seeing already are Enphase Energy (ENPH) , Ping Identity (PING) , Aurinia (AUPH) and Datadog (DDOG) .
One new buy I added this morning is Intelsat (I) , but I'm not in any rush to add new exposure right now. My main focus is ending the year with accounts at highs and having plenty of cash on hand for some new opportunities and strategies in January.