While lacking the drama of last week's blackout, there was a power outage of sorts on Wall Street Thursday. At first glance, the final tallies suggest a modest up session featuring a new 52-week high for the

Nasdaq Composite

. But bullish traders were somewhat disappointed by the market's performance, and rightfully so.

Major averages rose sharply at the opening bell, following another rise in Japan's Nikkei 225 and an unexpected dip in weekly jobless claims, and that brought the four-week moving average to its lowest level since February. But stock proxies stumbled back toward break-even at midmorning, then bounced again after the 12 p.m. EDT release of a much stronger than expected Philadelphia Fed survey, to its highest level since June 1998.

But major averages proved unable to recapture their initial highs, although another push in the final 90 minutes enabled the Comp to close marginally above its July 14 intraday high of 1776.10 and helped the

S&P 500

avoid an outright negative session.

The Comp closed up 1% to 1777.55 after trading as high as 1783.60, while the S&P 500 ended up 0.3% to 1003.27 vs. its intraday best of 1009.53 and nadir of 999.33.

The

Dow Jones Industrial Average

rose 0.3% to 9423.68 after trading as high as 9481.44.

At more than 1.4 billion on the

Big Board

and 1.8 billion over the counter, volume was up from recent levels, and advancers bested decliners by 20 to 11 in both venues.

Despite the Comp's ability to scratch its way above its July 14 highs, some technicians expressed concern about the "negative divergence" exhibited by the S&P's inability to even test its July high of 1015.

The S&P's lack of confirmation of Tuesday's new high in the Dow and the Comp's need to make a new high "and not give it right back" are "the two glaring negatives to watch," commented Scott Bleier of HybridInvestors.com.

Treasuries are another potential negative, although they ended well above Thursday's intraday lows. The price of the benchmark 10-year note fell 10/32 to 98 6/32, its yield rising to 4.48%. In so-called other markets, the dollar continued its recent advance, especially vs. the euro, which fell under $1.10. The greenback's strength contributed to gold's 1.4% slide while oil prices jumped 2.6%.

Bears in Bulls' Clothing, Reprise

The market's midmorning swoon was attributed by some to rumors of an erroneous futures trade via Goldman Sachs, recalling July's

mini-madness. A Goldman Sachs spokesman said there was "no truth" to the rumor, though he declined to discuss it any further.

Other sources speculated the trade was a legitimate (and large) sell order of E-Mini S&P 500 futures executed by Goldman on behalf of a hedge fund client.

"I highly doubt it was an error," said Brad Sullivan, founder of Chicago-based Group 6 Trading, which specializes in index futures. "There's no panic on Goldman's desk. It wasn't a case where they came in selling truckloads and then tried to buy 'em right back," as would likely occur if the original trade were erroneous.

While conceding a lack of specific knowledge, Sullivan speculated the trade was executed on behalf of a hedge fund client looking to establish a short position. "I'd be very surprised if this was not just the first leg of a position," he continued, estimating that Thursday's trade was likely between 10,000 and 20,000 E-mini futures contracts. (The E-minis trade on the Chicago Mercantile Exchange and are one-fifth the size of the pit-traded S&P futures.)

It could take two or three weeks to establish such a big position, Sullivan speculated, suggested the hedge fund in question might actually hope the market keeps rallying, in order to "trap" more participants for the eventual fall. "They'll scale up

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andsell all the way."

Citing a "fair amount of selling all the way up -- the kind that's not going away," he disputed the notion that what's occurring is a momentum-driven rally, offering some observations that dovetail with an

earlier column about sentiment.

"Guys are starting to put on positions up here on the sell side for a break in September or into October,

and you're starting to see legs put on," he said, with this morning's big futures trade being an example.

Having gotten long in early August, Sullivan is currently neutral and moving toward a slightly negative stance. "I think the trade to make is to play cautiously short but not bet the world," he said.

However, he agreed that "when you have everyone expecting one thing, the opposite tends to occur."

Which brings us back to this morning's conversation about rising expectations for a "splat" this fall.

To date, this year has been a surprising one, most notably its strong first half vs. forecasts in late 2002 of a tough first half and strong second half.

Extrapolating this further, if a significant number of participants are expecting a fall "splat", the surprise would be if it doesn't occur. If the S&P is able to stay above 950 in the coming five to six weeks, "I think you'll see a large rally from mid-October into Thanksgiving day," Sullivan predicted.

More surprising still would be if the market then stumbled in the fourth-quarter, traditionally a strong seasonal period.

And (drum roll, please) the

really

interesting thing is that a sharp fourth-quarter slide would be in sync with the

Japan scenario discussed earlier this week, which is something scant few market players are worried about.

Kibbles and Tid-Bits

Bernie Schaeffer of Schaeffer's Investment Research in Cincinnati suggested the technical pattern of the CBOE Market Volatility Index augurs more declines ahead for the VIX, which dipped 0.9% to 19.53 Thursday.

"Further VIX downside would almost certainly be accompanied by a rally in the S&P 500," Schaeffer declared, suggesting "the heavy focus in the financial media in recent months on the low VIX as a bearish indicator has bullish contrarian implications."

In the "old gurus never die" department, Abby Cohen of Goldman Sachs raised her earnings forecast for the S&P 500 to $49 from $46 for 2003 and to $53 from $51 for 2004.

In the "slipped through the cracks" department, James Rohrbach of Investment Models issued a sell signal on the New York Stock Exchange after the close on Aug. 1 and on the Nasdaq after the close on Aug. 5.

The sell calls reversed well-timed buy recommendations he made on March 24 for the NYSE and March 20 for the Comp.

After the close Monday, Rohrbach reversed field again, issuing buy signals for both the Big Board and Comp.

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.