Instead, the driving force in January will remain the Federal Reserve. The risk that the events of January will go against the bears and the short-sellers will keep them from ganging up on stocks. Until the Federal Reserve acts, I think the trend in the market will be up. After that, I think the advantage shifts back to the sellers. And stocks, driven by earnings woes and sour economic numbers, will come under pressure again.
Investors ought to plan accordingly.
Buy, if you must, early in the month. Certainly, don't chase stocks that have already rallied strongly. Consider taking profits quickly in any January buy that has climbed near to a resistance level. Use any rally to sell stocks that don't seem to have much potential in 2001 or that are showing signs of fundamental deterioration. Think about using them as a source of cash for future buys.