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At the beginning of the year, money managers decided to buy AOL after not owning it in '98 and underperforming. They vowed not to"not get AOLd again" Well, now having loaded up on AOL despite valuation "problems", they are getting "AOLd again", not in ways they imagined. My guess is that despite margin difficulties, a lot of strung out internet accounts were hanging on by a thread until today. This should push quite a few over the wall both psychologically and really [in terms of actually getting the dreaded call] Many I-Net stocks are around their 200 day MA an area of possible support, but it is the end of the quarter the next two weeks, so portfolio managers will tend to push out underperformers. Combine that with the impairment of/from Internet heavy margin accounts, and still could be more trouble. The stocks are very oversold, but valuations are no support from any reasonable measure, despite the % declines that have already occurred. The cyclicals and oils graze peacefully, oblivious to the sector carnage. A dangerous time to either initiate long or short positions in Internet stocks it seems to me. Rallies might be sharp but brief. Has to be some base building after this amount of damage. SFEs next support around $55, the 200 day MA. Mike |
