Market participants are putting the finishing touches on a surprisingly strong year. There has been a sprint to the finishing line with speculative small-caps leading the charge and now there is some last-minute positioning in some of the names that gained the most as traders close up shop.
The action Thursday is largely driven by factors other than the individual merits of stocks so the movement is more random than usual. Last-minute tax planning, window dressing, and positioning are dominating the rather quiet action.
I want to take this opportunity to wish everyone the best in the New Year. I have no idea what the market is going to do in 2021 but I am quite confident that we will have plenty of great opportunities along the way. We don't need the market to go straight up to produce some good returns.
I'll be spending some time this weekend prioritizing my favorite stocks and developing strategies for trading them. Some downside volatility may be the most positive thing in the short term.
One name I've been asked about recently is Aurinia Pharmaceuticals (AUPH) . I believe that there has been tax-loss selling that has pressured it recently and that should be lifted when the calendar rolls over. An FDA decision will be coming in a few weeks. I believe positive anticipation should start to kick in soon. I'm adding a little today.
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These conditions presented themselves four times in 2020, three of which resulted in market corrections.
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