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Some call it "profit taking", some call it "stumbling out of the gate" and others call it "finally giving up the ghost after the Xmas retail season".
I'll take the latter two.
"Profit taking" is far too positive a euphemism for what's coming.
I think this is pretty weak analysis. The pent up selling demand is going to be a really imprecise predictor for the market as a whole, even if the analysis is top notch. That said, like any short-term market direction call, it has almost 50% change of being right.
Where the pent-up selling demand is a stronger signal is among individual stocks. Everybody knows about the rebound following tax loss selling. However, it seems that not as many know about the tax-related pent-up selling demand for individual stocks. Here's an example of an academic working apper on the topic: http://personal.lse.ac.uk/polk/research/tax20071118.pdf
Or maybe it's all crowded and that paper's strategy will lose money like almost all the other academic paper trading strategies....
How does one deal with a Pent-up Hold demand while being tugged between buy/sell?