croumagnon,
I think the "January effect" may well be overridden by $100/barrel oil and the continuing subprime housing/mortgage crisis which, I believe, is far from over. And a recession may be looming. Some analysts say that the recession has already begun, but the numbers are lagging.
I expect the Fed to come to the rescue with lower rates and more liquidity. I would expect, at least, a full-point basis cut in the coming year.
But all this means that January as a harbinger of things to come may not prove true this year. But then again....who knows?
Well, I guess no one can attribute today's market woes to tax-loss selling. (LOL)
Let's hope 2008 is a lot better than 2007 for small-cap biotech investors.
Bladerunner