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Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: Rajiv who wrote (12715)	12/22/1998 9:36:00 AM
From: Mike Hagerty	Read Replies (1) \| Respond to of 13594

FWIW from another board: To: Debra Orlow (2163 ) From: donald sew Thursday, Dec 17 1998 9:40AM ET Reply # of 2588 INDEX UPDATE =========================== Just heard on CNBC that MERRIL feels that the upmove in AMZN was a bit over done. Also heard some analyst is coming out and saying that AMZN is a $50 stock. I do not trade the internets, but recently I have taken a strong interest in it since I believe that when the internet tops, such would be a sign that the overall market may have put in a mid-term top. The internet index(DOT.X) had a parabolic peak at 450 at the end of NOV and I feel that could have been the top. That is not to say that some individual issues can not go higher, since AMAZON did. Manic buying still continued after the peak at the end of NOV, but such manic buying narrowed significantly during the recent upswing in the DOT.X. To recap - the DOT.X plummeted from 450 to about 300 in only 4 days (33% decline), and only rebounded to the 350-360 range - still about 90 ponts below the highs. Per yesterday's close at 356 on the DOT.X, that would represent a 20% decline off the high. Per some text books,a 20% decline represents a BEAR MARKET. I realise that the internet, with its manic characteristics may skew things, but it should not be discounted that the DOT.X is 20% off its highs. Keep in mind that during the decline of the overall market that started in the spring/summer, the smaller issues actually started pulling back in April, while the big issues did not start to pullback until JULY so there was about a 2-3 month lag. In light of this, my position is that the top is in for the internets as a whole (DOT.X), and there may still be some individual internets(the GENERALS) climbing to new highs/forming double tops, like AOL, YHOO, AMZN. These GENERALs/fewer individual issues should probably peak soon, within 1-2 months(latest end FEB). When the GENERALs peak, many will say that was the turning point for the internets, but I believe that the peak was set at the end of NOV when the DOT.X hit 450 and is a leading indicator for the peak in the GENERALS of the internet which should be soon. Please also keep in mind that my positon is that once the peak is in on the INTERNETS, which I believe is the case except for some of the GENERALs, then within 1 year they will all lose at least 50%, with many losing most of their gains(some have already). This was based on my limited study of manic buying trends. Seeya