It is very much history repeating. Could be read in conjunction with Charles Mackay's book Extraordinary popular delusions and the madness of crowds, Galbraith's book, the Crash of '29, of Kindleberger's book 'Mania's Panics and Crashes'. Our next Indicator will talk more about this phenomenon.

(ps, Hyal pharmacy this week changed name to Meditech, note support at the mid point.)

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On a cold Melbourne night last week 30 day traders gathered at a restaurant in Malvern for dinner. As the beer and wine flowed, these strangers known to each other by their bizarre trading names, exchanged stories about exploits on the superhighway.

"I lost $60,000 last year on Formulab," said "Mr Dow Jones", a middle aged accountant whose business card carries the line "Money never sleeps" (from Oliver Stones's film Wall Street, made during the 1980's boom). "Mr X", 20 something, with rings on his fingers and a ponytail, had just been tipped off about a mining company. "Get into it mate, its set to jump - you can't lose" he said. The pseudonyms that hide day-traders identities from ASIC and the Australian Tax Office include "Sir Baz" , "Claudia Schifter", "Bud Fox" and "Smokey". The restaurant evening was a chance to meet face to face , but it wasn't just a social event. It also meant a chance to network for people always on the lookout for the next hot stock, the next hit.

A team led by The Gun and Mr Dow Jones was spruiking an audacious plan to pump the market for millions of dollars; it had no problems attracting participants. The idea was to set up a million-dollar investment club whereby 20 say traders would each put $50,000 into a central pool to be punted on the stock market. It would be the ultimate day trade. "I'm getting so much interest about this idea that I could fill it with people three or four times over. Even stockbrokers have been ringing me up offering to put in $50,000," The Gun said.

The internet and information revolution has combined with the public's enthusiasm for playing the stock market to create this new breed of investor. Day-traders take advantage of the low cost of buying and selling shares online to trade highly liquid and volatile stocks from the comfort of home. Often the stocks are under 10 cents, so half-a- cent price movements are enough to net these stay at home traders thousands of dollars with the flick of a cursor.

"Gerald Soros" has $200,000 in shares, but can increase that to $400,000 if he uses his margin lending accounts. "In a good month I can make $25,000 profit while my biggest loss was $15,000 - the price of that stock never recovered, it just went down, " he said. "I get all the information from the Internet, you couldn't have done this stuff two years ago," he says.

The development of Internet chat rooms has given day-traders a pack mentality, and when a share price starts to move the call is sent out that a killing is about to be made. Australia's crew of day-traders have developed an informal but very effective network and it only takes one message posted on an Internet bulletin board to alert the pack. Then they pounce. One trader usually jumps first, scooping up millions of shares, and suddenly chat rooms like hotcopper.com and #day traders, are buzzing with talk and everybody jumps on for a ride.

It doesn't take long for the wider investment community to hear about the stock, thanks to the brokers who tap into the day-trading Internet sites and then call their clients. But, as new investors pile into the shares most day-traders are already heading for the exit door. That night at the dinner party the day-traders were talking about their latest kill, Hyal Pharmaceutical. The little known drug company had been trading most of the year at eight cents, but one of the day-traders had heard talk of a miracle cure for breast cancer that could add millions of dollars to the group's bottom line. A number of traders bought Hyal at eight cents on 24 May, while The Gun picked up more than 50,000 shares the following day. It was time to alert the pack.

Within minutes of a message about Hyal being posted on the Internet, hundreds of traders around the country poured in. On 26 May the stock hit 11 cents and was rising. The crucial moment for those traders who bought the stock at eight cents was when word spread to the wider market about Hyal's potential discovery. On 27 May 61 million shares were traded in a company that only had 50 million shares on market, with the day traders accounting for most of the volumes. The share price immediately spiked to a high of 27 cents. Day-traders who bought at the ground floor realised profits of more than 230 per cent. Between 26 May and 31 May, 100 million shares in Hyal Pharmaceutical changed hands, meaning all the company's issued shares were traded twice over. At one point, 10 day-traders virtually owned the company.

Hyal's share price came crashing back to earth, and as thousands of investors were left wondering what had gone wrong, the day-traders had collectively raked in millions.

A spokeswomen for ASIC said it had not been asked by the Australian Stock exchange to investigate trading in Hyal Pharmaceutical, and that the day trading community was not under scrutiny at the moment. But she did confirm the the newly set up Electronic Enforcement Division would monitor all aspects of the Internet relating to stocks and share trading.

Most day traders seem unaware or unconcerned that a stock market crash may be just around the corner. Many believe that if a major correction does occur they will either see the signs and get out or there will always be someone willing to buy their stocks. "Markets usually have a bit of a downward dip before a crash and when my shares go down by 7 per cent, I'll be out," Surfi said. Gerald Soros is even more confident about his ability to outmanoeuvre diving share prices. "I plan to be out of the market when the crash happens, I won't get caught. With the technical analysis I use I can predict with certainty what will happen two or three days in advance."

But day traders never really think about crashes; it tends to get in the way of making money.

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