Wilem Jabbour lives in one of the prime spawning grounds of the New Economy: Redmond, Wash., the home of

Microsoft

(MSFT) - Get Report

. It's no wonder the 34-year-old professional ping-pong player jumped into the bull market aggressively over the past few years.

Now he's wishing that maybe he hadn't fallen quite so hard for the lure of tech stocks. "Most of the people I know are either wiped out or have maybe a third left," he says. "I had roughly $1.3 million three months ago. Today, it's roughly $750,000."

Forgive Jabbour if he seems a bull market cliche. He and half of America, it seems, are learning for the first time that stocks do in fact go down sometimes -- sometimes a lot. The market's precipitous slide since early April has turned the worlds of tech companies, financial professionals and investors upside down. They're not all down and out just yet, but they are in pain, serious pain.

Jabbour didn't even chase the

really

speculative tech names. He held

Cisco

(CSCO) - Get Report

,

America Online

(AOL)

,

Yahoo!

(YHOO)

and

Lycos

(LCOS)

.

So for now, Jabbour is done. "I'm not buying anything. I'm not selling anything. I'm not bothering to look at it anymore," he says.

In northern Virginia, where the shadow of AOL looms large, money manager David Schultz says two of his clients have sold out their entire portfolios in the past week, a drastic move he admits he hasn't seen in years.

"It was capitulation dragged out to make sure it hurt. To get this kind of correction, you've got to have enough pain to get some people out of the market," he says. "People went from making money every day to losing money every day. They started to bail."

Many of Schultz's clients are AOL employees who grew wealthy on employee stock options, and he says they're lucky to have a financial adviser. "Many other investors don't have the safety net to not do something stupid. They'll have sold their Oracle at 60 or their EMC at 103," he says, citing two of his current favorite stocks.

For him, it's back to picking stocks he's willing to hold through tough times, such as

Inktomi

(INKT)

and

Computer Sciences

(CSC)

.

Time for a Change

One factor Schultz is happy to see is daytraders and momentum traders leaving the market. "It will give us a chance

to invest without worrying about volatility," he says.

The problem with the departure of the most speculative investors, however, is the effect on the companies their enthusiasm once buoyed. Without these players, it is already harder for some dot-coms to launch IPOs. And the receding momentum has affected existing tech stocks -- both the fly-by-night and quality companies.

The clearest evidence that the momentum players of the world are in retreat is shrinking trading volume. The online brokerage business is suffering atrophy as a result.

Robertson Stephens

analyst Scott Appleby said this week he expects June transaction volume at the online firms to decline as much as 25%. And Charles Biderman's

TrimTabs.com

estimates that investors pulled $7.2 billion out of equity mutual funds for the week ending May 17.

The individual investor's reticence is also forcing some attitude adjusting for Net companies. Charles Millard, the former head of Internet investment banking at

Prudential Securities

, says he's starting to see some pain on Silicon Alley in New York. "Everyone is actually beginning to look at expenses," he says, noting that even some hiring plans have been reduced. "People are much more interested in when they're going to be profitable."

Millard, who left Pru earlier this year after the firm's acquisition of West Coast banking firm

Volpe Brown Whelan

, can even wax poetic about the prospects for the small firms trying to deliver profitability on top of their potential. He cites a line in John Keats'

"Ode on a Grecian Urn" that reads, "Heard melodies are sweet, but those unheard are sweeter." "That reality," Millard says, "is now hitting people right in the face."

Millard says he believes investors will return when they start to see profitability from companies they expected to fail. "Nobody is giving up but they are being confronted by reality," he says.

Reality for Jabbour is staying out of the fray until he starts to see bankruptcies weed out weaker stocks, strengthening the foundation of the overall market.

Livin' Large No More

Meanwhile, in Silicon Valley a hedge fund manager has his own yardstick for measuring whether the economy is slowing.

Instead of looking at the

Consumer Price Index

or how much growth in

GDP is slowing, he looks at the strength in backorders for the new Ferrari

Modena, perhaps

the

status symbol for the ultra rich in this very rich area.

"The reason I look at that as a barometer is because it measures a different aspect of society," says the manager, who requested anonymity to protect his own spot on the list. "It doesn't measure Joe Six Pack. It measures the extremely wealthy. I figure when those folks start feeling the pinch, that's when we're in real trouble. Those are the bull market items."

So far, things are still going smoothly. The manager says his survey of Ferrari dealers in the area, who tell him that there are more Ferraris in Northern California than in Europe, doesn't point to any slowdown in demand for the cars yet.

"That's what's amazing," the manager says. "In the April volatility,

nothing.

No one dropped off the list. So maybe the really wealthy aren't feeling the pinch yet. On the other hand, maybe that just means that they've already cashed out."

But perhaps the true barometer the manager should be using is himself. Asked whether he would still buy the car should his name rise to the top of the list now, he balked. "Not until the market starts going back in the right direction," he said. "At this point, I'd probably say 'Pass.' Otherwise, I wouldn't be able to look my wife in the eye."

Investor Jabbour is feeling much the same way, and says his personal spending won't be quite as brisk. "Two months ago I was buying myself toys -- electronic equipment, fun stuff -- every two days," he says. "Now, I think about it 10 times before I do it because I'm worried more about inflation." He's also scaled back plans to buy another car and help a relative finance a business.

Two months ago, Jabbour could talk stocks with anyone in Redmond, including his doctor, who owns

RealNetworks

(RNWK) - Get Report

, and his dentist, who trades covered calls.

But now? "Most of the people I know aren't talking," he says. "They aren't showing off anymore."