Not Great, But Good Enough

US indices registered another positive session on Monday, even though the gains were marginal at best. Still, investors shrugged off weekend terrorism threat news and another big drop in China's markets.

Dow 13,676.32 +8.21; NASDAQ 2,618.29 +4.37; S&P 500 1,539.18 +2.84; NYSE Composite 10,064.45 +21.45

While investors in China's emerging market adjust to the realities of government intervention and an overheated environment, US shareholders are singing the praises of being old, established and considered ultra-safe.

As America slept, the Shanghai Composite divested itself to the tune of an 8.3% drop, the largest one-day decline since

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the 8.8% collapse in late February that triggered market selloffs throughout the global financial community. The Dow lost over 400 points then, but today's reaction was more of a yawn than a shriek.

Please send Alan Greenspan a note that he's no longer relevant.

Even though overall market gains were negligible, internal numbers were solid. Advancing issues outperformed losers by roughly a 5-4 margin. New highs trounced new lows, 545-69, an eye-popping differential.

As long as the A-D and High-Low lines remain so heavily positive, this market has no possibility of turning lower any time soon. Despite high gas prices and an inept, ineffectual federal government (that may be a good thing), stocks continue to be superb short term instruments.

One reason for the unprecedented long bull run may be summed up in three words: supply and demand. The heavy handed private capitalists have been snapping up shares and taking them private. At the same time, a slew of companies have been engaged in huge stock buy-back programs. While each of these activities indicates some degree of underappreciated value in US shares, they both dilute the number of shares available to the investing public.

Money has to go somewhere, and those shares previously invested in companies which have been taken private, gets re-invested elsewhere. Stock buy back programs takes more shares away from the investing public. According to Keynes, insufficient availability always results in higher prices, every time, and stocks are no different than apples or iPods.

With those two trends in place, expect public shares to continue rising for some time to come.

Checking commodities, those things which actually are in somewhat limited supply, oil gained another $1.13 to $66.21. Gold and silver barely budged. Grains and other foodstuffs were equally somnambulant.

Today was not a great day, but by any measure, it was a good one.