Gone for a Smoke

Net stocks whipsawed today in a terrifying spectacle of what can happen when the big buyers all take a break at the same time.
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What happened midday? What caused that quick Net selloff? Why did

Sun Microsystems

(SUNW) - Get Report

start dropping and

AOL

(AOL)

head back down? And why did they start heading back up immediately, as if nothing had happened?

Perhaps the head traders of

Munder

,

Ultra

and

Janus

all simultaneously went to the rest room? No other reason can justify such a sharp decline and quick move back up.

Look, let's level with each other. This pattern is what ALWAYS happens when the winning funds get money in. During 1996 we saw the oil drillers (the drillers for heaven's sake, remember those?) go up huge at the beginning of the second quarter as money piled into the funds that owned these names.

The only thing you need to know is the one thing no one will ever tell you: when the big winners are in buying their stocks. This is the most closely guarded secret there is. Sometimes these buyers take a break, they get off the desk, they go for a walk, a smoke -- heck, how do I know? -- and then the stocks plummet.

Occasionally the buyers take a break at the same time and a vacuum ensues. That's what causes these quick declines and ramps back up. For the truly nimble, these can be the moments to strike and build. But for most people they are just moments of terror on the way to new highs.

Until the money stops coming in. When does that happen? Talk about pure imponderables. That's the biggest of all. My guess? No time soon. Not for these winners. We haven't even seen the monthlies come out yet with their Munder, Ultra and Janus cover stories!

Let's wait for those before we hit the exits.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long America Online, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

letters@thestreet.com.