Jim Brown 7/8/02, 5:23:26 PM
Pivot Trade Wrap
Bernie in Hot Seat -While Bernie Ebbers sweated bullets in the hot seat today the markets showed no follow through to Friday's gains. When we started this morning there were two likely scenarios. An opening dip and rally to new highs or an opening bounce and afternoon sell off. We got both. An opening dip, rally and then afternoon sell off. The amount of the afternoon dip, about a -110 point decline, was about what was expected after the +300 point gain. The afternoon bounce off that dip appeared to be the start of a rebound off that profit taking. Unfortunately the rebound failed.
Whether it was the controversy brewing over the WCOM hearing or just worries about the impending earnings cycle we don't know. The morning started with Merrill, Morgan and Goldman Sachs buying large quantities of S&P futures but the trend changed almost immediately. Tomorrow we will see if this afternoon was just profit taking or the prelude to another leg down. There was a small buy program at 20 min before the close but the volume was very weak. Neither IBM nor INTC have warned and earnings are fast approaching. Bulls may not be interested in taking positions at this level until after the giants have spoken. It is hard to build a case for a positive week and the negativity from the WCOM hearings could drag on the markets. Stay tuned.
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