Most major stock markets indexes began July the third quarter of 2002, the same way they ended the second  quarter, that is, to continue to decline.

Fueling the stock market's decline was the never ending stream of  financial news depicting the continuing corporate mischief by many public corporations in reference to their accounting methodologies.

I suppose investors become jaded to the horrific financial disclosure and scandals that were released daily throughout July, and as such, the stock market's decline in the first few weeks of July was in a sense, very orderly. It  averted an all out capitulation or panic selling frenzy that may have been justified in the midst of the  disclosures of the scandalous behavior of many corporate chieftains.

Investors by and large abhor uncertainty, and you would think if you couldn't trust the financial statements of the largest public corporations, that no one would even want to own a single share of any

stock.

Against this backdrop of  waning investor confidence, the stock market did have several historic percentage point rallies in the first three weeks of July. Each of these bear rallies was immediately accompanied by an equally ferocious sell-off, bringing most major stock market indexes to their lowest point for 2002 by the third week of July.

Then sparked by a new found courage, investors started to bottom fish many stocks in the last trading week of July, raising many stocks off their lows for 2002.

In July, our great government leaders in Washington managed to pass a new bill making corporate fraud more illegal than it already was. President Bush vented his optimism about the fundamentals of the U.S. economy being on sound ground  throughout July . I guess he was spooked by the continuing decline of the stock market.

The Security and Exchange  Commission (SEC) also set a

deadline of August 14th, for  many public corporations to have their CEOs certify the validity of their respective financial statements. The goal of the SEC is to  try to ease the angst of many stock market investors as to the credibility of the financial statements disseminated  to the public by public corporations.

July ended with most major stock market indexes rallying off their lows as investors tried to bottom fish many stocks that had declined significantly.

In early August, most major stock market indexes continued to decline as many traders locked in their recent profits.

However, the bulls again regained the upper-hand throughout most of August as most of the major stock market indexes rallied aggressively.

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