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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: I. N. Vester who wrote (3942)	8/25/1998 3:57:00 PM
From: barrcuda	Respond to of 27311

This reminds me of my predicament at the end of 97. I had VLNC margined at only about 20% when it started to sink. I kept telling myself that I was safe right up to the day of recognition when I had to sell it all and several other companies just to cover the call. I took what was left and bought July calls. I felt that if they hadn't made it by then, the stock would be just about worthless anyway. Well, we all know what happened to those calls. My point is if you can't own this stock then LEAVE IT ALONE. It will have your ass for lunch otherwise. DSW Los Alamos

To: I. N. Vester who wrote (3942)	8/25/1998 4:01:00 PM
From: John Curtis	Read Replies (1) \| Respond to of 27311

I.N.: As J.B. has pointed out, what's the use of monitoring every little up/down blip? Until VLNC comes through on their milestones then they'll wallow all around the place, with selling dominating the landscape. Just stay away from margin and make sure you've protected yourself. Patience is key at this point. Bottom Line? All we can do is wait for the next shoe to drop. So while we wait, smoke 'em if ya got 'em. Oh....here's some light reading on one aspect of how MM's support their market: Some ways MM's entice sellers; Run the stock up with a "tight spead" in a fast market, then "open" up the spread to slow down the buying interest. After it has "cooled off" for a little while lower the offer below the last trade right after a small piece trades on the offer then tighten the spread so that the sellers feel they can take a "quick profit" by "hitting the bid" on the tight spread. Once the selling starts the MM's will walk it down quickly by only making small prints on the way down with the tight spread. Another way is by running the stock up in the morning, averaging up their short then use the above technique to walk it down in the afternoon. Hopefully after doing this for several days, it will demoralize the buyers. The volume will dry up and the sellers will materialize thinking that the game is over. Contrary to popular opinion, MM usually Do Not Cover in Fast moving markets either Up or Down if they are short. They Short more. They usually try to cover after the frenzy is out of the market. Does the latter part of the above article ring any bells? Of course, this is just one persons opinion. Meanwhile, as I said, smoke 'em if ya got 'em. John~