There wasn't any empirical reason for it, actually, since historically the year following the election of a Republican President is bearish. But last November, just about everyone expected a postelection rally. And just about everyone was disappointed, of course, when the market fell into decline for days after the election. The old saw was sharpened again: Stocks never cooperate with the consensus. They don't always do the opposite, either. A going-nowhere market is not necessarily spinning its wheels; it could be biding time until expectations fade before embarking on the move the populace used to expect.

Often the direction of a pending move can be sensed through the buildup of undercurrents beneath a deceptively calm surface. Professionals don't usually sit around doing nothing; they are up to something, somewhere. The challenge to the casual stock player is to discover and identify the hidden flow of smart money.

For the first time in many moons, one such stream has favorably involved the INC. stocks. After a three-month plunge, in the course of which both the NASDAQ and American Stock Exchange Industrials were able to post net gains, the proprietary INC. Index turned the tables and rallied smartly as its two speculative compatriots went sideways. Investors were channeling buying into what might be called the "Third World" of equities -- young, dividendless, upstart companies with the potential to become solid citizens on the strength of their own revenues once quarterly black figures became regular. And indeed, even through thin times, this cheeky body was seen to be able to make profits where their Big Board brethren may have failed. It doesn't take just new, small-capitalization company stocks to fall 80% in a couple of weeks. Storage Technology, seeking Chapter 11 protection, did it with 34.5 million shares.

Taking renewed investment courage from a single-month stirring of the INC. Index might be grasping at straws, but as it has occurred against the trend, perhaps kissing off this lot so thoroughly may have been premature on the part of timid speculators. That conclusion was confirmed by the surprising continued buoyancy in the IPO aftermarket. In one month, initial public offerings of September gained a collective 16%, also in the midst of a flat overall market. To have rankly speculative stocks starting to edge upward while nothing much else was happening suggests that, should the postelection bull market finally unfold as hoped for, lower-tier equities may take a vigorous part in the initial upleg, rather than waiting for a later stage, as is more often the case.