I think that the nuts are in big trouble right now for several reasons.
First of all, there are all those nasty margin calls. Many speculators may likely be forced out of their cherished holdings over the next few days. And that presumes that brokerages don't tighten margin requirements any further than they already have. Margin calls are like a self-fulfilling prophesy in that the selling (and likely lower stock prices) created by today's margin calls means more accounts eligible for margin calls tonight and tomorrow which in turn accelerates any downward pressures and perpetuates a downward cycle almost like a death spiral. It is also worthy to note that there are many folks out there that will sell (even panic sell) to avoid a margin call, or to lock in whatever profits may remain or simply activate a mental stop-loss exit point. These are just plain everyday folks, not the institutions, and they're making real-life decisions regarding their real-life investments.
Speaking of institutions, how far do the prices drop from the institutional entry points before these guys start selling? Remember, in many instances institutions are guided by program selling, which I don't think we've seen yet in any large quantities. But there is a point at which the funds will cry "Uncle!" and attempt to stop their bleeding. That's a fact. What isn't clearly known is exactly at what point does any given fund exit the playing field...
I think that the foreign investors will start taking some money off the table pretty quickly now, as emerging markets and foreign markets might offer a safer haven for their capital (at least over the short term, say 3 or 4 months). Foreign capital is likely to get much more conservative as treasury bonds become more attractive when compared on a risk-adjusted basis with US equities. I believe this to be true for the US markets in general, not just the DOT COM stocks. Nonetheless, any reallocation of foreign capital would only serve to exacerbate any downward price pressures on the nuts.
The next reason on my list has to do with the laws of supply and demand. Specifically, right now there is too much supply and demand is waning rapidly. Early shareholders who had/have large numbers of shares (such as nut insiders) have been selling some of those shares into the frenzied demand starting around last October or so. Add to that the number of new internet related businesses with recent IPOs and top it all off with secondary offerings (as well as stock splits) from some of the companies. The sheer number of available shares in internet related businesses simply exceeds the demand for those same shares, at least at the current PE "expense" ratios.
And the last reason I see big problems ahead is the shorts. Professional shorters have literally taken it in the shorts over the past 2 or 3 years on some of these stocks (like AOL or AMZN or e-Bay just to name 3). Shorts can smell the blood running on the Street. Most professional shorts are quite good at their chosen careers, and I suspect we may see some shortselling here in the very near future. Some individual investors may even resort to options as a form of insurance against further price drops. If any of this is true, again it will only add additional dead weight to any downward price pressures.
Sometimes the market is like a big pendulum. It swings left and it swings right. The market giveth and the market taketh away. Right now I sense that the market is not in a generous mood. Just my opinions though... Anyone care to consider whether or not any perceived Y2K problems may be weighing on the minds of internet investors???
DISCLAIMER: I have no current investments in any internet stocks, long or short, and I have have no plans to change my current status for the foreseeable future... <g>