The first shot was fired across the bow of the Internets today. Ebay was down 21 1/16 @ 252 7/8, Earthlink was down 7 11/16 @ 59 9/16, Mindspring Enterprises was down 5 @ 62, and Onsale was down 7 @ 44. Although most of the non-Internet investors are glad to see them possibly get their comeuppance, it doesn't help the market as it removes some speculative enthusiasm. It's better if they just go sideways for a while, like 10 or 20 years.

I think today was mostly a bout of good old-fashioned profit taking, after a string of successive up days. The money is still out there, and it has to find a home. This market is still going higher, but I would concentrate on the beaten-up issues. Those that have done so well are still good holds, but I wouldn't make much of a new fund commitment in them unless the buy was just for a short-term trade.

Tomorrow is key for buyers, as your target shopping bag of stocks will probably not get much cheaper over the next month or two. Buy, buy, buy, at least for now. After the incoming money rush is over, probably within the first two weeks of January, we'll get more cautious. But we always have to be vigilant, in case our strategy runs into unexpected problems. Stay tuned.

The Market Pro - December 30, 1998