Since March 2000, the only victories bulls have been able to manage have been of the Pyrrhic variety. Today being yet another example.

After some surprising early strength, major averages slid from midmorning until about 1 p.m. EDT, when they embarked on a robust rally spurred by the

dollar's recovery from its early weakness, and rumors of a truce between India and Pakistan. When it turned out those near-warring nations had merely agreed to accept an invitation from Russian President Vladimir Putin for mediation talks, the financial markets swooned again.

Stocks then bounced once more in the final 30 minutes, as traders gleaned a positive spin from comments by

Federal Reserve

Chairman Alan Greenspan. In a speech at the International Monetary Conference in Montreal, Greenspan said: "I suspect the American economy is in an upswing; it's not going to be a dramatic upswing ... but events look increasingly positive."

The late surge left major averages with final tallies that woefully underrepresented the session's rather wild nature.

The

Dow Jones Industrial Average

finished down 0.2% to 9686.80 after trading as high as 9739.41 and as low as 9592.79.

General Motors

(GM) - Get Report

was the biggest drag on the index, falling 3% after it reported a steep year-over-year drop in sales for May late yesterday.

Conversely, the

Nasdaq Composite

rose 1% to 1578.10 despite a warning by

Flextronics

(FLEX) - Get Report

, which fell 19.6%, and a

front-running scandal that shaved 21.1% off

Knight Trading's

(NITE)

shares. The Comp traded as high as 1587.79 and as low as 1548.31.

The tech-rich index was buoyed by strength in some of its biggest components, including

Intel

(INTC) - Get Report

and

Cisco

(CSCO) - Get Report

, which each rose more than 3%. The Nasdaq 100 climbed 1.7% while the Philadelphia Stock Exchange Semiconductor Index rose 3.4%

Among broader market averages, the

S&P 500

rose fractionally to 1040.69 vs. its intraday high of 1046.06 and its low of 1030.52, while the

Russell 2000

lost 0.1% to 473.76 after trading as high as 475.11 and as low as 467.11.

Despite heavy losses, the Nasdaq closed above its May lows

yesterday, even as other averages breached theirs. That, in turn, had some observers suggesting the long-awaited reawakening of big-cap tech names was at hand.

Today's action is going to further fuel such hopes, especially given that small- and mid-cap indices struggled again. The S&P MidCap 400 fell 0.7% while the S&P SmallCap 600 shed 0.5%. In addition, the Comp rallied, even though losing stocks outpaced winners by 6 to 5 in over-the-counter trading, where 1.6 billion shares changed hands.

However, while some believe misery for the so-called average stock will prove a boon for big-caps, the folks at Dorsey, Wright & Associates believe "the risk is high in all stocks," according to Kevin Depew, a technical analyst at the Richmond, Va.-based firm.

Specifically, Depew observed that the

New York Stock Exchange's

bullish percentage indicator reversed yesterday to a defensive stance from an offensive once that had been intact since Oct. 11.

The NYSE bullish percentage indicator was created by A.W. Cohen in 1955 and is calculated by dividing the number of NYSE stocks trading on new point-and-figure buy signals by the total listed on the exchange, Depew explained. When the percentage of stocks with buy signals rises above 70%, they are generally considered overbought; below 30% is considered oversold. (Point-and-figure charts are pure price charts that plot supply and demand for a given stock or index, without factoring in time or volume.)

The best sell signals occur when the indicator moves above 70% and then reverses by at least 6%, Depew continued. In April, the NYSE bullish reading peaked at 68% -- its highest level since 1998 -- and yesterday fell below 62%, Depew reported, calling the indicator a "risk indicator" rather than a precise timing tool.

"We don't try to play hero, or villain as the case may be, by calling market bottoms and market tops," he said. "This indicator can't tell us where a bottom or a top is. What it can do, however, is tell us what kind of risk environment we are operating in. This is especially true at the extremes."

Currently, the indicator is saying "the risk in general is pretty high," Depew said, noting that other indicators the firm uses are also on the defensive. "That doesn't mean liquidate

assets, but it's not a time to be putting money to work."

As for the small- vs. big-cap debate, he observed "short-term breakdowns" in some small- and mid-cap averages but said relative strength indicators suggest the average stock remains stronger than its bigger counterparts.

Which Way Is Down?

Todd Ault, a principal at Ault Glazer & Co., a Los Angeles-based hedge fund, agreed with Depew that small-caps may have stalled in the short term but remain more attractive long term.

Small- and mid-cap stocks are "still delivering earnings" and "don't have years of potential scandal built in" their results, the hedge fund manager said.

The string of scandalous developments -- today's being the indictment of former

Tyco

(TYC)

CEO Denis Kozlowski and the aforementioned charges against Knight Trading -- have been a "disaster" for corporate America, Ault said.

"There's a total lack of confidence

and the government's rhetoric is terrible" for those looking for a signal the investigations will soon end. (Today, 29 states filed suit against

Bristol-Myers Squibb

(BMY) - Get Report

for allegedly blocking a generic version of the anticancer drug Taxol.)

Noting reports of big blocks for sale of firms such as

IBM

(IBM) - Get Report

and

Corning

(GLW) - Get Report

, Ault said "some people are throwing in the towel."

Of course, history has shown that this is the precise time for prudent buying, and both IBM and Corning ended higher on the session. Ault agreed, but long positions are still only 30% of the roughly $30 million hedge fund, which he said is "up slightly" year to date after rising more than 20% in 2001.

"I've got to think we're close to shaking people out," he said, noting the spike in put/call ratios, which settled at 0.86 today after trading at 1.09 early in the session. "The monkey wrench is corporate trust. There's a lack of confidence left and right. I don't think I've seen so many people have no idea what to do."

It's a predicament many find themselves in these days, as the market is giving few clear signals of what's coming next.

Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback to

Aaron L. Task.