Traction controll light comes on and off. have new brake pads and rotors

the rotors might be bad

Changing brake pads and rotors will not solve this problem. Go to Auto Zone and have them read your computer for ABS codes and then you can zero in on the problem.

Rotors could be one problem.Check fluid level.Who did the brakes.Abs is sensor which is in hub bearings .Could be bad.

Has this happened after you replaced the sensors for the abs. if so they have to be set at a gap close to the rotor sensor to read correctly. The other thing maybe if the new sensors area slightly different to the original ones the abs might be having trouble identifying them.
The last one maybe, could the new brake pads be causing flexing or pushing against something resulting in this intermittent problem.

The ABS and Service Traction system may be due to bad sensors or signal reaching the ABS/Traction Control computer. The grinding may be due to uneven or unsmooth rotors, and/or worn out pads or shoes.

I would recommend that the entire braking system be diagnosed at your local dealer or brake service facility.

It can be the pads. The wheel sensors count the revolutions of each wheel. On some rear drive differentials there is a sensor in the Differential that can go bad. But if the Brake pads are in pieces, the wheel sensors view can be blocked and the sensors lose count.

The Traction control will activate. Traction control can work in several ways. Some controls activate the rear brakes until both rear wheels are spinning the same RPM. This is destructive to the brake pads. Additional Traction control will cut the engine by choking it or interfering with the Ignition. When the rear wheels spin the same RPM, power is restored. This system is easier on the brakes.

The Emergency brakes are inside the rear Rotor if you have 4 wheel disc brakes. The sensors are in the Drum portion of the Rotors. A lot of Brake shops fail to check the E brakes because so much has to be disassembled. Your Mercury should have a Button on the dash to turn off the feature. Turn it off until you can have it checked.

Traction control and anti-locks(ABS) lights come on there is sensors that are pluged in behind the rotors check and see if they are disconected or loose sometimes when you change your brake pads they might come loose and not making contact.

Because the brakes were changed, either one of the sensors were broken when removing brakes or it has set a code. Go to your local autoparts store and have them reset the code. See if it comes back on. If it does you will need to look at the ABS sensors on each wheel and replace if damaged

have to ask is the relucter for the abs sensor on the axle or rotor

Just a thought ....... check for uneven tire pressure , or different tire sizes.