So how do we grade it? So far, not so good. Stock prices plunged in the first week of the New Year, continuing a very poor pattern of counter-seasonal weakness that has dragged on for almost three months now.

We had hoped to see a decent rally after the December tax selling dried up. But that hasn't happened, so we have to reckon with the increasing possibility that a weak economy may hinder corporate earnings growth in the first half of 2008.

None of this means you have to tear your portfolio up and start all over. However, you should plan to take some defensive measures over the next few weeks. I'll let you know of any opportunities I find in the coming weeks.