Glitter guns shot sparkling colored clouds into the air. The principal players, bathed in spotlights, strutted on a carpet of crimson sawdust. The star entered through a curtain of machine-made pewter fog as the band struck up Hail to the Chief. The extravaganza? An auction of Arabian horses staged by director Mike Nichols, who began breeding the animals six years ago "to give me a change from show business."

The sale, on his 60-acre Connecticut farm, put 30 of his 80 pure-blooded Arabians on the block. The day's festivities lasted 12 hours and gave Nichols as many butterflies as the recent Broadway debut of his production of David Rabe's Streamers (which got raves). "It's another opening night," Nichols said nervously.

Nichols, born in Berlin and brought up in New York and Chicago, has become a breeder of considerable stature. He has shown such beauties as Elkin and Elkana, winners of the U.S. National Championships in 1972, and Talagato, a 1974 Canadian national champion. It was no surprise, therefore, that 2,000 persons—including neighbors, Mike's celebrity pals and more than 60 breeders of Arabians from around the world—turned out in the rain for the auction. Nichols had set up three yellow-and-white tents in his backyard. In one, Alice Brock of "Alice's Restaurant" fame produced caldrons of chili (spiced up, she said, with 15 pounds of garlic). The second tent contained tables decorated with red and white carnations. The auction was held in the third and largest tent.

On hand were such celebs as Candy Bergen, who has kept an Arabian horse of her own in California; Art Garfunkel, who starred with Candy in Nichols' film Carnal Knowledge; Brooke Hopper, ex-wife of Dennis Hopper and daughter of film producer Leland Hayward; and Buck Henry, who wrote Mike's top-grossing movie, The Graduate. Warren Beatty escorted Jacqueline Onassis, who rides to hounds and owns a New Jersey house where she keeps horses. Mrs. Onassis bid unsuccessfully on a striking bay mare, Viva, who went for $14,500. Brooke Hopper picked up a 2-year-old, Paco, for a mere $5,250, the lowest price of the day. "I hope you all get the horse you want," Nichols told the crowd, "and I hope I make enough to pay for the flowers." He did. All told, the auction brought in about one million dollars.

The stars in the auction, not those in the audience, stole the show. Draped in red carnations, the horses entered the tent by a ramp covered with red sawdust, as their names blazed in lights across an electronic marquee. Elkana, a luminous gray mare, was first on. As she stepped majestically through the smoke curtain, the crowd roared with approval, and Candy Bergen unleashed an ear-splitting blast from a burlesque comic's wolf whistle. (An official of the International Arabian Horse Association said: "The elaborateness of this event is not unusual. Most sales are elaborate. But the theatrical trimmings, that's pure Nichols.")

Once Elkana was front and center, she pranced about the arena to a medley of I Feel Pretty, Let Me Entertain You, I Enjoy Being a Girl and A Pretty Girl Is Like a Melody. Prompted by a handler in red vest and black fedora, she stopped at appropriate moments and froze into statuesque poses. Her act was never topped, and the $185,000 paid for her by Aude Espourteille of Butte Falls, Oreg. was the day's high and a world auction record for an Arabian. Aude, 24, daughter of an Arizona cattle rancher, took delivery of Elkana last week.

Several of the mares were presented with their offspring, and one of them, Amythyst, not only had her own colt but was also in foal. The three-in-one package, at $43,000, was the day's bargain. All the horses, stallions and mares, are guaranteed breeders.

When it was over, Nichols suffered a letdown. "I still can't quite face the fact that I sold Elkana," he said. "I walk by her stall and can't look at her." Then he added, in consolation: "But all the horses went to nice people who adore them."