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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Aljorma who wrote (11135)	4/17/1999 4:02:00 PM
From: robert duke	Read Replies (1) \| Respond to of 41369

Well those who own large amounts of stock probably started to sell on purpose along with outher to cause this run up to end. Then many small time investors start to sell in a panic. then the stock drops from 175 to 139. At this point those big sellers buy the same stock the sold getting back in a low prices before the next run up.

To: Aljorma who wrote (11135)	4/17/1999 4:53:00 PM
From: Ken W	Respond to of 41369

Al, Maybe I can help a little. First AOL is a NYSE stock so there is no MM involved..MM's are co's that "Make a Market" in a stock, generally on the NASD, AMX, CHGO, BOST exchanges and others. NYSE uses Specialists which basically is the go between from your buy or sell order and another persons buy or sell order. How the Spec. makes his money is in the spread. Unfortunatly humans are humans and greed is greed. Supposedly the only way for the Spec. to make money is in what is called the spread. You want to sell your stock for 150. The spec. is supposed to match that order with someone that wants to buy at 150. There is generally at 1/4 to 1/2 spread to the cross so the spec. makes the difference of that 1/4 or 1/2. Does not sound like much but try it on 10 to 20 million shares per day and it does add up. Now, enter human greed. Say I'm a spec. in AOL and I see that there are alot of sell orders end of day at market. I have huge buying power on the stock so go short. The selling starts and panics some of the little guys who also panic more little guys. Next week I cover the short position at a much lower price and the differnce is pure profit. Now since I have all kinds of buying power I buy back twice as many shares as I covered and as the stock begins to move back up I am selling into those higher prices. Money on the way down and money on the way up. The profit taking in AOL for the last week and a half has set up a classic shakeout situation just prior to earnings and perhaps even more news ie: buy out of something or another split. The spec. and smart money is quitely buying these cheaper shares as the weak of heart are wringing their hands and wondering if they did the right thing. IMO if you sell now you will either have the stock run away from you or buy back expensive shares down the line. Ken