Stocks Keep Drifting Upward, but Traders Fret About Energy Prices and Low Volume


Stocks swelled up in another low-volume trading session to kick off the week on Monday. With interest rates still near zero -- for the time being, at least -- and signs that an economic recovery is taking shape, the momentum was to the upside, even though pre-opening sentiment was for a down day after the health care overhaul passed late Sunday.

But "the trend is your friend," as Alan Valdes of Kabrik Trading told DailyFinance in an interview Friday on the floor of the New York Stock Exchange.

Still, Monday's lack of volume signifies a lack of conviction in the otherwise impressive moves higher since the market hit its lows last March. And individual investors badly burned over the last decade have yet to wade back in, Valdes said.

Rising energy prices are one hurdle for the market. As gasoline prices at the pump rise to $3 a gallon, many consumers find themselves shelling out $120 a week to fill up a typical 20-gallon tank twice a week, Valdes said.

Consumers, however, have been more resilient than was most traders have anticipated, and retail sales have come in largely ahead of analyst expectations. Despite persistent high unemployment rates, the deepest worries about job losses seem to have passed. "If people haven't lost their job by now, most feel they are now OK," Valdes said.

Getting risk-averse investors to step back into the market -- and deliver the kind of volume traders like to see as a sign of true conviction -- could take much longer, though.