Some people would do anything to avoid paying taxes. They'll hang on to stocks that should be sold or sell stocks that should be held in order to avoid capital gains. Except in rare cases, I don't allow my trading decisions to be overruled by tax concerns. After all, someone has to pay for health care, education, roads, bridges, etc. - and Peter McKay's jaunts, lol.

Tax loss selling has been particularly brutal this year and it makes sense. A down year following 2 good years would generate the perfect storm. Many investors would have taken profits early this year but still be down on the year - particularly those who invested in juniors. So, unless they dumped their losers, they would be in a loss situation and still owe capital gains taxes - a situation most people would try to avoid.

All this sets up the best Santa trade situation since 2008. Tax loss sellers would have more cash than usual, and a lot of stocks are more beaten down than usual. The coming week will be the last chance to pick up bargains. I generally look at this as a 4-6 week trade, although I might consider playing a run into spring for some stocks.