To understand the dilemma facing investors after a 22% rise in the Nasdaq Composite this year, consider the manic-depressive trading of network-management software maker Micromuse ( MUSE).

In October last year, the market seemed to believe Micromuse was going out of business. Shares that had traded as high as $108 in 2000 had fallen to $1.37, valuing the company for less than its stash of cash.

Now, nine months later, feeling more buoyant as the decline in corporate technology spending has appeared to flatten out, investors have pushed the company's market value up sevenfold, to around $10.

So were investors more right about Micromuse at $108, at $1.37, or now, near $10? And what does trading in the stock augur for its peers among high-flying technology stocks, if anything?

The answer is critical, at a time when stocks appear ready to take a breather.

Among experts signaling for a timeout is Mr. P, a veteran hedge fund manager who has anonymously made accurate market-timing calls in this column over the past three years. Regular readers will recall he became a raging bull last October after a two-year bout of bearishness, and he reiterated his positive view on equities in February, March and April. (His billion-dollar fund, available only to offshore financial institutions, is up about 35% this year, after a 100% advance last year.) But he called this week to say he's finally pulling some chips off the table.

Mr. P expects a correction, starting between now and June 17, that could potentially take the broad averages down as much as 20%, or to their March lows. "I'm taking profits, because I'm up and I'm not stupid," he said. "The market has moved a long way in a short time. We're still constructive on stocks, but not as much as three months ago."

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