Stocks Drift, End Higher

The trading today was akin to watching paint dry. All of the indices traded in a narrow range, hovering above and below the flat line. Volume, as it has the last three days, remained on the low side.

Dow 12,594.03 +45.68; NASDAQ 2,486.70 +5.46; S&P 500 1,390.84 +5.49; NYSE Composite 9,364.34 +50.32

The advances of the past two days are highly illusory. In the absence of any concrete economic news, traders are forced into a condition of buying despite their best instincts. It's really a herd mentality at work. Once the market is up for a while, investors get the idea that everything is OK and it's safe to buy stocks.

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And they're buying up anything that has been beaten down over the past 9 months, which is just about everything. Stocks are still risky, despite what any analyst or market wonk may tell you, me, their neighbors or friends. The government continues to sound the "all clear" horns, though behind the scenes, inflation, foreclosures, tight credit and the employment condition have them scared to death.

So, the indices will gain smallish amounts for days, but then, just like last week, there will be a sudden realization that the market stinks and the US economic ship is still sinking. Low volume tells us that the smart money is still sitting on the deck, sipping mai tais, waiting for the eventual storm to capsize the whole ship, crew and all. The correction in stocks may not be swift, but slow and deadly, but one thing is certain, it will be deep, just like the recession the government seeks to avoid/obfuscate/ignore.

On the day, advancers beat decliners, 3481-2811. New lows continue to hold sway over new highs, 196-112. The highs-lows metric continues to suggest lower days ahead, in the near term.

Oil rebounded again, gaining $2.18 to $131.03. Gold dipped, losing $7.80, to $905.00. Silver also lost ground, declining 5 cents to $17.42.

With two days past and two to go in the short week, expect a little bit of turnaround on either Thursday or Friday. Of course, whatever happens will not be extraordinary, unless some outside force is felt on Wall Street, or unless the smart money goes completely to the sidelines, which would likely result in a 3-400 point drop on the Dow.

The more probable condition is the slow-drip torture method we've witnessed over the past months. A few days up, then down. Rinse, repeat. Lose.

NYSE Volume 1,205,546,000
NASDAQ Volume 1,862,700,000