Another Big Monday for the Dow

After ending last week with modest losses, the Dow and other major US equity indices raged higher on Monday, with blue chips in the lead. The tenor of the trade was eerily similar to last Monday's in which the Dow headed higher before noon, leveled off and sold off slightly into the close.

The only difference was that there was no late afternoon selling. The Dow remained close to its highs for the day from 11:30 onward.

Dow 12,226.17 +115.76; NASDAQ 2,394.41 +21.75; S&P 500 1,402.06 +15.11; NYSE Composite 9,091.00 +107.99

Volume showed a less-than-enthusiastic buying crowd, though advancing issues swamped declining ones by a 5-2 margin. Last week's trend in the new highs-new lows metric has now completely reversed for the third time in four weeks, with new highs posting a 209-96 advantage on the day.

With the Fed set to issue a statement on interest rate policy on Wednesday, today's buyers seemed confident that last week's alarming PPI numbers were muted by the tame CPI reading and that inflation is still not a problem. That said, there's almost nobody on Wall Street who thinks the Fed will either raise or lower rates this week.

The market may have to search for a catalyst as the only other meaningful data out this week (beyond the scores of the NCCA tournament games) are in the housing sector, a market segment that's already seen more than its fair share of battering over the past month.

So, investors will have to do what every good investor must in times like these: wait for signals. The problem is that there may not be many signs being flashed on the exchanges until quarterly earnings begin rolling out in three weeks. It will be interesting to see what traders occupy themselves with, barring any meaningful news or earth-shaking announcements.

In what's possibly been the best news of all for this shaky market, the price of a barrel of crude oil continued to fall on Monday, closing down another 52 cents to $56.59. Gold and silver, the precious metals usually-referred to as the best defense against inflation, posted negligible gains.

If we continue to follow the recent market pattern, today's gain will become rather meaningless by mid-week. Monday's mirthful mood could turn into more frustration by Friday as the correction continues into week 5.