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There has never been a dearth of people to claim that tech had gone too far or that the stocks were dangerously overextended while other issues had unnecessarily languished.

Until a few weeks ago, various investment strategists were regularly trotting out charts showing how the selling in old-economy names had gotten ridiculously overdone and how the move in tech had gone from being merely parabolic to paranormal.

But nobody was prepared for the vicious rotation the market has lately taken and the way investors have rapidly shifted money out of

Nasdaq Stock Market

names and into so-called old-economy stocks.

In the past week, the

Nasdaq Composite

has shed 14.8% while the

NYSE Composite


Dow Jones Industrial Average

have actually gained ground. News that


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fell apart over the weekend accelerated the move Monday, when the Nasdaq dropped 7.6% while the Dow added 2.8%.

The violence of the move has shocked even the most seasoned observers.

"Rarely have I seen a day as stupid as today," says Larry Rice, chief investment officer at


. "Talk about a market of excess -- this is nuts. I can understand the Nasdaq having its correction, but to push up the Dow by 300 points here is as excessive on the upside as is the Nasdaq is on the downside."

The problem with such excessive moves is that they can easily be reversed. No sooner could the last buyer go into the "Old Economy" stocks than momentum could shift back into tech. It makes it a very difficult climate for long-term investors -- rather than traders -- to put money to work. So they sit out the market during volatile spells, or throw up their hands and lower their time horizons. This makes the market more prone to big swings, with everyone piling into, and out of, the same things at once.

"It's a snowball effect," says John Manahan, head trader at

Brown Brothers Harriman

. "The Street acts in herds and that's what's going on here. The more that gets sold, the more that come in to sell. The strange thing is this could reverse tomorrow. We could have people buying the better tech stocks."

It seems unlikely that investors have seen the last of such violent swings in the market. Market volatility has been steadily climbing since the mid-1990s, notes

First Union Securities

chief technical analyst Greg Nie.

"Volatility has really been a growing issue since 1998," he says. "It's been part and parcel of the move up." Nor, with the advent of the day-trader, does Nie think the trend will change.

"Rightly or wrongly, investors have become much more short-term oriented," he says. "We're in a high-risk market."