Some say that 2008 was the year of the short, but more accurately, it was the year of the trade.

In hibernation since the dot com crash, those moving in and out of the market during the last year made out like bandits.

On the flip side of the traders, 2008 marked the death, at least temporarily of buy and hold. Those stubbornly refusing to sell stocks when the correction transformed into a full blown bear market were eaten alive.

Now with a new year here, those buy and hold desperados are hoping the market will bounce back.

Not Your Average Recession

These are no ordinary circumstances that our economy faces today. The banking system is in disarray and Wall Street has let us down a path of greed and fraud. We are overextended as a nation and as individuals.

It will take time to fix these problems plain and simple. While it is understandable to think a market down some 40% in 2008 is simply due for a rebound rally, it is purely wishful thinking.

When the great Warren Buffett suggests that investors should lower their expectations in the near future he is addressing the buy and hold crowd.

Capitalizing on Volatility

What Buffet fails to mention is that it will be a bumpy road along the way. Those bumps translate into volatility and volatility is the lifeblood of those following a trading approach to the market.

So while those that sit on their portfolios dither in the wind, the willing investor who surfs the waves that are sure to come over the next year or two are likely to deliver returns that exceed Buffett’s expectations.

2009 thus far has been a dud. There has been no January effect rally as the market has lost more than 5% so far.

In my opinion, the early weakness is likely to be recovered over the next month or two. As such I want to do some buying with the 25% cash that sits in the portfolio. I’m making a few trades today in my model portfolio.

Specifically, I am increasing my technology and oil and gas exposure by adding more shares of ProShares Ultra Long Oil and Gas Fund (DIG) and I-Shares S&P North American Technology (IGM).

I’m also adding a new position by purchasing shares of the Rydex 2X Russell 2000 Fund (RRY).

These are not long term positions mind you, but put in place to take advantage of volatitily and ride the next wave higher.

This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com. James F. Dlugosch contributed to this article.