Small Gains in Nowhere Market

Stocks continue their September dance, going nowhere fast, admirably marking time between Labor Day and the mid-term elections. November 2 cannot get here quickly enough for most of the remaining participants in the market. There's no upside to either the market or the economy in sight and lingering fears of a stagnation or limited growth potential in the US have investors, traders and casual players on the sidelines.

The slow pace of the market is making for some dull reporting - this blog included - and the days of "everybody's an investor" seem to be officially and permanently gone. The ownership society has given way to a nation of savers, worriers and soon-to-be-retirees.

For the second straight day, stocks ramped up at the open and sold off throughout the day. Even though the major indices have recorded gains in five of the past six sessions, there's an unmistakable, unsustainable feeling to it all.

Dow 10,415.24, +28.23 (0.27%)
NASDAQ 2,236.20, +7.33 (0.33%)
S&P 500 1,104.19, +5.32 (0.48%)
NYSE Composite 7,034.17, +34.23 (0.49%)

Advancing issues led decliners again, though the margin has narrowed, 3331-2352. New highs remained well ahead of new lows, 378-59, and volume was, again, sub-par. It's gotten to the point that reporting on the lack of volume in the markets is not even news. It is really becoming the "new normal."

NASDAQ Volume 1,602,241,250
NYSE Volume 3,365,649,250

Oil fell 42 cents, settling at $74.25. The precious metals failed to sustain their elevated levels for a day, with gold down $6.70, to $1,248.90, and silver off by 16 cents, to $19.81. There seems to be a surplus of everything except new credit unless one is a major corporation with a AAA rating, from cash to oil to homes to stocks. There's even evidence of a worldwide oil glut developing.

The effects of cheaper oil - some say as low as $40-50 per barrel would certainly fit into the deflationist argument, though the Fed and European central bankers are doing everything they can to avoid such a scenario. If deflation becomes inevitable, while a boon to middle and lower classes, the effect on paper wealth - in stocks, bonds and derivatives - could be devastating.

Despite what experts are saying about inflation running rampant, it's still a difficult concept to embrace when unemployment remains at record levels, consumers are more concerned about paying down debt than buying new things and home prices may begin a second leg lower.

Oversupply is inherently deflationary, but the force of the central banking cartel continues to push against reality.