There has to be a sound way to play these manic moves in the high flying tech stocks such as JNPR, SCMR, ARBA, RBAK, etc. They are the main game in town. Even more volatile then they usually act. One of the most frustrating aspects of playing these stocks is that they are highly correlated with the NASDAQ, making it hard to predict the next moves. Its always more difficult to predict the market than it is to predict a stock. They live and die with the NASDAQ, but over the last 2 days, there have been signs of weakness, not much, but there seems to be a glimmer of hope. On the short side. The only reason these high flyers are mentioned at all is because there just isn't much else to short out there. Adjustments need to be made in a market like this where tech stocks are getting wrecked left and right, and then bounce up furiously out of the blue. And the sad thing is, the dotcom wrecking ball has cleared out a lot of the fat that were on these pigs.

One of the most important things to consider when shorting these stocks is to time the move as well as possible. That's what makes them so difficult to play. If the timing is off, your head can be chopped off in an instant. It appears that the best time to short the gators is after they've rallied for a couple of days. Its always scary to short these on an up day, and even on a down day, but from looking at the quote screen all day, here's a bit of what I've taken away. You don't want to be short these stocks after they've gone down in the past few days. The snapback rallies in these stocks are vicious. Its better to try and time a top then to follow the trend and short and risk getting caught in a snapback rally. Now, this would have been suicide in February, but the indexes now don't run as far as they used to. The NASDAQ seems deeper and deeper entrenched in a bear market, with the bottom calls still ringing loudly by optimistic investment firms. Almost everything in the NASDAQ index is broken, even some of the high flyers. They still have a lot of fat that's yet to be sheared, and the profit opportunities are enormous if they are timed well. Lots of risk, but also lots of reward. And lately, they haven't acted so mighty. There are cracks that seem to be found in these companies, where people are starting to realize that its risky holding these overvalued pigs. And once the stampede to the exit begins, there is no going back for these dream machines.

Still, its always a lower percentage play to short these growth monsters than to short pump and dumps. Frankly, I've yet to figure out a consistent way to profit from them. But looking at how these things trade everyday shows me that the tide is changing. The COMPX has not been this much in the red this late into the year in a long time. There is a lot of significance in that fact alone. Despite records amounts of inflows so far this year, stocks are down. And down significantly. In the end, it all comes down to supply and demand. There are quite a number of these growth monsters in the market. They have large market capitalizations which soak up liquidity like a giant sponge. The demand for absurdly valued tech stocks is waning, and saturation has been reached. Once perceptions change about holding a JNPR like its a high rate CD, then the real damage will commence. It will be a spectacular down move. They'll fall like YHOO did a couple of weeks ago, where every bounce was met with mountains of sellers. The risks are now weighed towards those that are long this market, in the past the shorts were always on their heels.

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